Transcription
And the problem across the country are property taxes. Property taxes really make it unpleasant to own a home. And they've been rising quite substantially lately. And there's a new move to really cap property taxes like Prop 13.
>> If this is real, this changes everything. Can you imagine owning your own home and not having to pay rent to the government forever?
>> Because let's face it, that's what property taxes feel like to a lot of people. You're paying rent to the government. So, right now, there are several states that are looking to eliminate property taxes to zero.
>> Is it true?
>> They are. I'm going to break down to you which states are proposing this. I'm also going to share with you the the burning question. How are they going to fund those services if they eliminate the property taxes? Don't worry, I got your back. So, let's get started.
I'm sure you've been seeing this on the news headlines this past year of states wanting to eliminate property taxes. And I get it. You know, I have been hearing more and more of people not being able to afford their homes anymore because their property taxes rose substantially once they moved in. And I'm talking about just in the last few years because of the rising home values. Towns have reassessed their property taxes and the taxes have skyrocketed. I applaud these politicians for taking a stance and trying to do something about these taxes to make living in their home more affordable.
So, let's get into the list of states that are proposing this. Okay, first on the list, it's good old Florida. Florida has been front and center on this since the beginning of the year. Governor Ronda Santis firmly believes that homeowners should not be paying rent to the government. That's how he views it. And I can't agree with him more. I'm sorry. I'm not getting political here, but it does feel like that. You're paying rent to the government. You don't feel like you truly own your home. And I hear this a lot from you guys, my viewers, from my clients. It's a lot of money. Florida has proposed a bill, the HJR201 bill, and this is to eliminate the property taxes for Floridians. Right now, it has passed the House in Florida. That bill is now sitting in the Senate. It has not been passed by the Senate yet. Once it does get passed, then it's going to go in front of Florida voters in the next election, hopefully in 2026. And if voters approve of that, it will go into effect January of 2027.
Now, there's a lot of controversy about how is Florida going to make up that lost revenue from eliminating the property taxes. Well, there's a lot of talk about raising the sales tax, raising taxes on tourists. Now, keep in mind what this is proposing. It's eliminating the taxes for the services, not the schools. They'll still residents will still have to pay taxes for the schools in Florida, but everything else that will be eliminated and it will be funded through some other mechanism. So, that's something they still need to figure out exactly where they're going to pull that money from. So, this is why Florida's been front and center. And I have a feeling that this is going to pass because there's a lot of retirees that now live in Florida and they are on a fixed income. So, this would be huge for those homeowners in Florida.
Now, next on the list is Illinois. Did you know Illinois residents pay the second highest property taxes in the United States? Yeah, just they're a close second behind New Jersey. Now, a bill was introduced in Illinois called SB1862. And what the purpose of this bill is is to create a homestead exemption, but the exemption would eliminate property taxes for homeowners who have lived in their properties for 30 years. So for those people who have paid their dues, paid their taxes for 30 years, you don't have to pay anymore. Now they are getting a lot of push back on this one because why? It's upsetting to those first-time home buyers and brand new homeowners. You know, why can't they get some type of a break, some type of an exemption? So it may not just be for people who lived in their homes for 30 years. There is discussion. They're trying to reach a middle ground like say if you've been in your home 20 years or 10 years, they're still trying to come up with that. But this is what they're proposing in Illinois. to bring some type of relief to their property taxes. I mean, good on them. I wish Jersey would follow suit, but I digress.
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Next on the list is we have Kansas. State Representative Blake Carpenter is proposing an innovative proposal through the House Concurrent Resolution 5014. So Blake Carpenter was inspired by Norway. They have what's called a sovereign wealth fund. And what Norway does is they take accumulated revenues and use it for public benefit. So what does Blake Carpenter want to do? He wants to eliminate certain sales tax exemptions and he believes that will generate revenue of about $2 billion a year. So then he wants that money to flow into a new fund called the Freedom from Taxes Fund. And what his hope is is that he'll generate enough money, say about 13 to 15 billion in the next eight years. And in the interest earned off of that fund would then help pay for the state education fund which is currently supported by the property taxes. Now, I don't have any details on where this is right now for the state of Kansas, but I like the idea that of how they're finding the money to offset the loss of the revenue from the property taxes. So, this is key and I really hope this works out for Kansas.
Next, let's talk about Ohio. A grassroots campaign was formed by a bunch of homeowners in Ohio because they have had it with their property taxes.
I'M AS MAD AS HELL AND I'M NOT GOING TO TAKE THIS ANYMORE.
>> The grassroots campaign is called Citizens for Property Tax Reform and they want to abolish property taxes by amending their state constitution. Now, they were supposed to get 413,000 signatures on their petition by July 1st of this year. They missed that deadline, so that's why it didn't make it to the election for this year. However, they have reached those numbers of signatures. They have over 413,000 signatures. So, it will be on the ballot for November of 2026. So, good on you, Ohio homeowners. The only thing is how are you guys going to be funding that loss of property taxes? I just hope that the politicians will figure out where they're going to be pulling this money from. And you know, just like these other politicians who have looked into where can they pull the money from to help offset the cost so people don't have to worry about a reduction um or the quality of services that they receive from, you know, the police, the fire, um the roads, things like that.
Okay. Next, we have North Dakota. Now, North Dakota is is a little unique. They pretty much have their funds set up right now where they could help start this process of eliminating property taxes. Now, earlier this year, Governor Kelly Armstrong gave his state of the state address and he said he wanted to eliminate property taxes over the next 10 years for North Dakota residents. He wants to expand the tax credit that North Dakota residents currently receive from $500 up to $1,550 in the first year. And he's taking this money from the investments in their legacy fund. And right now, there's about $9 billion in their legacy fund. Now, the legacy fund is coming from money from the oil structures that they have in North Dakota. So, this makes North Dakota very unique because they have the oil structures that are able to bring in this revenue, right? A lot of states can't say they have things like this to help bring money into the state. So, North Dakota right now, they are in pretty good shape to start this process of eliminating the property taxes. So what Governor Armstrong's plan is as that legacy fund grows, okay, through the investments, homeowners are going to receive larger tax credits every year until their taxes are eventually eliminated altogether. So North Dakota is the closest to having an actual mechanism in place of of already having the revenue there, like I said, to bring in the money to offset the property taxes. So, I think they are in really good shape. If that proposal goes through, I I think North Dakota residents will be in really good shape and and not having to pay rent to the government much longer.
Next, let's talk about Pennsylvania. State Representative Russ Diamond has proposed a bill called House Bill 900. The goal of this is that he wants to enable true home ownership without homeowners feeling like they're tenants of the government. Okay, again, we're going back to paying rent to the government. Okay, I love that. I love that. you know, they're recognizing that and calling it what it is. The only problem is Russ Diamond does not have a plan to bring in revenue from elsewhere to offset the loss of those property taxes. So, state senator Doug Mastriano actually stepped in. He's also proposing that they impose new taxes on endowments that are held by Pennsylvania's wealthiest universities. So, I would love to see this for Pennsylvania as well. I think this would be a great thing, but again, we got to come up with a way to offset the cost from the loss of the property taxes. So, let's see if Pennsylvania can pull this one off.
So, yeah, that is the biggest concern, right? If you're going to eliminate the property taxes, people are concerned. What happens to the schools? What happens to the police service, the fire service, the libraries, the the roads? Like, who's going to service the roads? I get that. So, that was my concern when I first heard Florida talking about this, eliminating the property taxes because I'm like, who's paying for that? The money's got to come from somewhere. Look, if they can find the money elsewhere, without even having to impose too many taxes, new taxes, in order to generate a fund to help pay for the property taxes, that would be a big win. You know, like North Dakota, North Dakota doesn't really have to impose any more taxes. They're going to be pulling this from their fund from a revenue generating thing that they already have with the oil structure. So, you know, not every state can do that. So, it's going to be challenging for them to to figure out where to find that money.
So, tell me, how do you feel about this? Do you live in any of these states? Comment below. I want to hear about it. What do you think about eliminating property taxes? I bet I can guess your answer. Yeah, you probably want them gone, too. Thank you so much for watching me today to get your dose of real estate reality. My name is Jackie Baker and I will see you next.