Property Tax Relief on the Ballot: Three Approaches, One Clear Winner

In November, voters across the country will not only choose who will represent them in elected office, but also whether to approve certain changes to their state constitutions and statutes, including a variety of proposed tax policy changes. Rising property taxes have dominated discussions in many state capitols and among homeowners and business owners. While some states have addressed rising property taxes through legislation, others have turned to the ballot box.

This November, 12 property tax measures are on the ballot across 7 states. The most consequential are proposals to substantially raise homestead exemptions or tighten assessment limits, proposals that would shift property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. burdens in economically distortionary ways. Alternatively, North Carolina voters will consider a levy limit that would limit property tax revenue growth in a structurally sound way.

Tightening Assessment Limits

Assessment limits cap the amount by which a property’s taxable assessed value can increase annually. Oklahoma State Question 847 would tighten the state’s current assessment limit by reducing the annual cap on fair cash value increases for homestead property and agricultural land from 3 percent to 1.75 percent and lower the cap for other property from 5 to 4 percent.

The measure would also modify Oklahoma’s property tax relief provisions for homeowners over the age of 65. Oklahoma’s constitution currently freezes the fair cash value of a homestead for qualifying seniors whose income does not exceed the local median income. State Question 847 would replace this with a tiered, income-based structure, allowing seniors with incomes up to 180 percent of the median to receive a special assessment limit ranging from 0.35 percent to 1.4 percent. Higher-income seniors would receive the standard 1.75 percent limit.

Assessment limits are often created to protect established property owners from rising taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. bills that could price them out of their homes, but they come with numerous unintended consequences.

First, they create a “lock-in” effect, where homeowners may be reluctant to move or improve their property because taxable value resets when a property is sold or substantially improved. This reduces housing mobility and makes it less likely that growing families or older homeowners will relocate to homes that better meet their needs.

Second, assessment limits cause similarly situated properties to have vastly different assessed values based solely on when they were purchased. Because newer property owners are more likely to have taxable values that reflect current market conditions, more of the property tax burden gets shifted onto them.

By widening the gap between market and assessed values—especially for homestead, seniors’, and agricultural properties—Oklahoma State Question 847 would shift more of Oklahoma’s property tax burdens onto non-favored properties, including commercial and industrial properties, rental properties, and second homes.

Expanding Homestead Exemptions

Homestead exemptions reduce property taxes on primary residences by excluding a portion of the property’s value from taxation. Two states are asking voters to massively expand their existing homestead exemptions.

Florida’s Amendment 3 would substantially increase the state’s homestead exemption for non-school district property taxes.

Under current law, Florida homeowners who qualify are exempt from all property taxes on the first $25,000 of assessed value. A second inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spendin-adjusted exemption of $25,000 applies to assessed value beginning at $50,000 but does not apply to school district property taxes.

Florida Amendment 3 would maintain the existing $25,000 homestead exemption for school district property taxes. For all other property taxes, the amendment would increase the homestead exemption to $150,000 beginning in 2027, and to $250,000 beginning in 2028. Amendment 3 would also direct the legislature to establish a uniform procedure for counties and municipalities to increase the exemption, if they choose, to any higher level, up to the exclusion of all homestead property value.

While Florida Amendment 3 has received significant attention in recent months, Wyoming Initiative 1 should not be overlooked. This measure would add an additional homestead exemption for certain property owners to its two existing homestead exemptions.

In 2024, lawmakers adopted a long-term homeowner exemption, which now stands at 50 percent of the first $3 million in market value on primary residences of owners or spouses 65 or older, who have paid Wyoming residential property taxes for at least 25 years and who live in the home at least eight months per year.

In 2025, lawmakers adopted a 25 percent exemption on the first $1 million in market value (of both land and structures) for owner-occupants of single-family residential housing who reside in the home at least eight months per year. Those claiming the 50 percent long-term homeowner exemption may not simultaneously claim the 25 percent exemption.

Initiative 1 would create a third homestead exemption that would exempt an additional 50 percent of a home’s value (excluding the underlying land), with no value cap, for owners who have been Wyoming residents for at least one year and who lived in the home for at least six months during the preceding year. Eligible homeowners could claim both the 25 percent exemption and the new 50 percent exemption.

While both Florida Amendment 3 and Wyoming Initiative 1 would provide substantial relief to qualifying homeowners, neither would reduce the cost of providing local government services. As a result, the tax burden would ultimately get shifted onto non-favored properties, including commercial and industrial properties. Moreover, because commercial apartment buildings and multi-family dwellings that are not owner-occupied would not qualify for the exemption, the increased tax burden would likely be passed along to many renters. Furthermore, two similarly situated properties could face significantly different tax bills solely due to differences in property classification and the owners’ residency statuses, undermining the principle of tax neutrality. 

Relief Provided by a Levy Limit

Conversely, if approved by voters, the North Carolina Property Tax Levy Limit Amendment would require the North Carolina General Assembly to enact a property tax levy limit for local governments. The amendment would supplement North Carolina’s existing statutory property tax rate limit of $1.50 per $100 of assessed value. 

Property values have risen significantly in recent years, outpacing inflation. In jurisdictions that have failed to adjust millages downward, property owners have experienced significant increases in their property tax bills. In North Carolina, property values rose substantially faster than inflation-adjusted property tax collections between 2018 and 2023. While some jurisdictions offset valuation increases with lower rates, others chose to capture the revenue windfall generated by higher property values.

North Carolina’s current rate limit constrains tax rates but does not directly limit total property tax collections. Valuation increases can generate significant additional revenue if rates are left unchanged or are reduced only slightly.

Why Levy Limits Work

Levy limits are the most effective approach for constraining the growth of property tax collections, and they are a reform that each of the states mentioned here could benefit from.

Unlike assessment limits and expanded homestead exemptions, which create significant economic distortions, levy limits constrain property tax collections growth in a neutral, economically efficient manner. They directly control the growth in overall property tax collections by serving as a kind of allowance for government spending. When property values rise such that maintaining a static millage rate would increase property tax collections from existing property beyond a certain level, levy limits require that millage rates be adjusted downward, preventing unlegislated tax increases. Well-designed levy limits permit a reasonable amount of revenue growth, often incorporating adjustments for inflation and new construction.

This approach provides revenue stability for local governments while preserving the relationship between property value and property tax liability. Unlike assessment limits and homestead exemptions, levy limits do not disincentivize moving, improvements to property, or new construction.

An Opportunity for North Carolina in 2027

In 2026, Iowa lawmakers enacted Senate File 2472, establishing a well-structured 2 percent property tax levy limit for cities and counties, with an allowance for new construction and improvements. Local government officials may adjust millage rates within the overall levy limit, provided they remain within Iowa’s current rate caps. Local governments may exceed the limit with voter approval at a special election.

If voters approve North Carolina’s amendment, lawmakers would have the opportunity in 2027 to follow in Iowa’s footsteps, designing a levy limit that works well for the state. A levy limit would be a structurally sound, long-term reform that preserves the property tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates., provides local governments with a stable and reliable revenue source, and avoids the distortionary policies that shift tax burdens rather than reducing them. Among the property tax relief options appearing on ballots this year, North Carolina’s proposed levy limit stands out as the most effective and economically neutral approach.

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