The boom in home prices is helping state and local governments’ pocketbooks. Property tax collections reached their highest level since at least 2009, according to a new analysis from the National Association of Home Builders.
Property owners paid $703.5 billion in the four quarters ending in the second quarter, up 13% for the year.
Tax revenues for state and local governments can be volatile. However, “property tax collections have proven relatively stable, reflecting the long-run stability of tangible property values as well as the smoothing effects of lagging assessments and annual adjustments,” the NAHB report says.
Property taxes, which make up the biggest segment of revenues for local governments, comprised 38.2% of state and local tax receipts for the four quarters ending in the second quarter. Individual income taxes (30.6%) and sales taxes (25.7%) make up the next largest segments of government revenues.
Source: “State and Local Property Tax Revenues Eclipse $700 Billion,” National Association of Home Builders’ Eye on Housing blog (Oct. 20, 2021) and “Booming Home Prices Are Boosting State and Local Governments,” MarketWatch (Oct. 25, 2021)
