Property Tax Assessment Bias
About Property Tax Assessment Bias
Property tax assessments in the United States have been found to systematically over assess low value properties and under assess high value properties. This means lower income homeowners pay a higher effective property tax rate than wealthy homeowners. A 2022 study by Carlos Avenancio Leon and Troup Howard found that Black and Hispanic homeowners pay 10 to 13 percent higher effective property tax rates than white homeowners in the same jurisdiction. The bias arises from assessment practices that do not adequately account for property condition and market differences. Some states have implemented assessment caps or circuit breakers to address these disparities. Chicago, Detroit, and Philadelphia have been sued over racially biased assessments. The problem is structural, rooted in the difficulty of accurately valuing millions of properties. Reforms include more frequent reassessments and improved valuation models.
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