The drop in mortgage interest rates reported in March, the first time in four years that rates fell below 6.0 percent, was welcome news that was followed by an uptick in mortgage applications. However, falling rates are far from the only factor that could help rein in housing costs. Aside from deregulatory reforms that help grow the supply of housing, consider the ongoing efforts by governors and legislators across the country, particularly in some of the nation’s fastest growing states, to tame rising property tax bills.
In many state capitals, calls for property tax relief, limitation, and even full repeal, have emerged as one of the nation’s hottest state policy trends, even giving the push for state income tax elimination a run for its money. However, unlike with personal and corporate income taxes, rising property tax burdens are a problem even in relatively low-tax red states.
In North Carolina, Republicans who run both chambers of the General Assembly have convened committees to study potential policy reforms that would rein in rising property tax burdens, which are a problem in rapidly growing parts of the state like Charlotte, Raleigh, Wilmington, and Asheville. While Tar Heel State lawmakers study options for limiting property tax bills, legislators in neighboring Tennessee and Georgia are further along in the consideration of bills that would implement similarly designed property tax limits in both states.
Just before the Georgia Legislature’s March 6 crossover deadline, the date by which bills must have passed out of one of the two legislative chambers, the Georgia House passed House Bill 1116, legislation to install a property tax levy limit that restricts the annual growth of property tax collections. Under HB 1116, local governments have to set property tax rates such that annual growth in property tax collections does not exceed the rate of inflation or 3.0 percent, whichever is lower.
“We intend to provide real, meaningful, and decisive property tax relief while at the same time remaining respectful of our local governments’ services and operations,” said Georgia Representative Shaw Blackmon (R), who pointed out that property tax collections in Georgia doubled between 2019 and 2025. During the second week of March, one week after the Georgia House approved HB 1116, the Tennessee General Assembly advanced legislation to install a similar property tax levy limit in the Volunteer State. House Bill 1873 and its companion, Senate Bill 2064, would limit annual growth in property tax collections to the rate of inflation plus two percent.
However, that Tennessee levy limit bill would later die in committee at the end of March. Despite its reputation as a deep red state, too many Republicans in the Tennessee General Assembly think a levy limit imposes an overly strict constraint on the growth of local governments. Back in Atlanta, despite getting through the House before the crossover deadline, the levy limit did not make it through the Georgia Senate before they adjourned in early April.
Members of the North Carolina House Property Tax Limitation Committee have made it clear they would like to pass a property tax levy limit like those recently considered in Georgia and Tennessee. “Levy limits that incorporate inflation and population growth place needed guardrails on property tax growth, and are a necessary first step to bring relief, predictability and accountability to property taxes,” said Representative Erin Parè (R), whose comments were echoed by her colleague Representative Brian Echevarria (R).
“A levy limit protects taxpayers by capping the rate at which total property tax collections can grow, promoting transparency and discipline without cutting existing revenue, freezing essential services, capping property values, or stripping local control,” Echevarria added. After listening, over the course of months, to some of his colleagues voicing concerns about local governments not being able to grow their budgets as fast as they want, Rep. Echevarria reminded his colleagues during a March 18 hearing that they were elected not to represent local governments, but to represent the taxpayers who fund local governments.
However, the biggest property tax debate on the horizon is poised to play out in Texas, where Governor Greg Abbott (R) is running for reelection on a six part property tax relief package. In addition to limiting annual growth of all local government spending, not just property tax collections, to the rate of population growth plus inflation, Gov. Abbott’s property tax relief package would also subject local tax hikes to a two-thirds supermajority voter approval. “No approval, no new taxes,” Gov. Abbott said in February during his 2026 State of the State address.
“Requiring any tax increase to clear a two-thirds majority vote is a nearly impossible task — and would make it easy to kill any measure aimed at providing basic services,” the Texas Tribune’s Joshua Fechter contended in a 2025 article that provides a sense of the opposition Abbott’s plan faces. Supporters of Gov. Abbott’s proposal respond to such contentions by noting that the current tax code provides enough revenue for “basic services,” especially considering that revenue collected from existing levies automatically grows in conjunction with rising population and income.
State Limitation of Local Government Budget Growth, Not Increased State Subsidization, Offers Path to Lasting Relief
Property tax levy limits like those introduced this year in Tennessee, Georgia, North Carolina, and elsewhere seek property tax relief and restraint through a cap on the rate by which property tax collections can rise. That, in turn, limits local officials’ ability to increase their budgets. While limiting the growth of total local spending would provide a greater level of property tax relief and protection, levy limits still provide significant taxpayer safeguards relative to the status quo in states that do not already have them.
From both a policy and political standpoint, levy limits are preferable to proposals that seek to limit or reduce property tax burdens by raising other taxes. Proposals to replace reduced property taxes with higher sales taxes are more accurately described as tax shifts rather than tax relief. What’s more, such proposals seek to transition from a loathed tax for which households are well aware of how much they pay, to a higher sales tax. No one has a clue how much they pay in sales taxes in a given year.
“Unlike property and income taxes, which have periodically provoked revolts, sales taxes have rarely faced organized political opposition,” the Manhattan Institute’s Judge Glock pointed out in a recent article for City Journal. “That helps explain why they are the one major tax category whose rates have risen almost continuously over the past century.”
The primary driver of soaring property tax bills is profligacy on the part of local governments, but many red state residents are also, in part, victims of their state legislature’s success in establishing an attractive tax and regulatory climate. The pro-growth policies enacted in Tennessee, Florida, Georgia, North Carolina, South Carolina, and Texas have made those states magnets for new residents, with that population growth contributing to rising property values that in turn drive up property tax bills.
The property tax levy limits considered this year in Georgia, Tennessee, and North Carolina get at the root of the problem, municipal overspending, in a way that state revenue transfers to local governments simply do not. By capping the growth of property tax collections rather than artificially suppressing rates without spending restraint, the reforms debated this year in Atlanta, Nashville, and Raleigh offer real and durable relief. Lawmakers in other states would do well to follow suit.
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