Homestead Exemptions, Heterogeneous Assessment, and Property Tax Progressivity

2022/02/03 by Keith Ihlanfeldt, Keith R. Ihlanfeldt, Luke P. Rodgers +1 · 3 citations
Economics, Econometrics and Finance · Business, Management and Accounting · #Housing Market and Economics #Financial Literacy, Pension, Retirement Analysis #Housing, Finance, and Neoliberalism

paper · doi:10.1086/717587

Abstract

Homestead exemption policies are ostensibly intended to reduce the property tax burden of lower-income homeowners. Because assessment rates tend be lower for higher-priced homes, the opposing effects of exemptions and regressive assessments can result in either a regressive or progressive property tax. Using 2018 data on all single-family homes in Florida, we find that in the majority of counties, the homestead exemption dominates regressive assessment, resulting in a progressive tax. We also explore how progressivity would be affected by modifying current features of the property tax, including the homestead exemption take-up rate, the cap on valuation growth, and regressive assessments.

Citations

• A Pure Theory of Local Expenditures

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• Reflections on the US Property Tax: Past, Present, and Future
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