If owning a home is the American Dream, property taxes could be a rude awakening for many dreamers. Opinion surveys gathered by the National Council of State Legislatures in 2023 found that property taxes were “the most hated tax” in the country, because of the lump-sum payments involved and the lack of control taxpayers have over the size of this liability.
Unfortunately, a recent analysis by ABC News and its affiliates found another reason to hate the tax: It unfairly impacts some homeowners more than others. According to the report, families in certain neighborhoods pay a disproportionate amount of property taxes and that could be putting them at greater risk of missing payments and losing their homes.
Here’s a closer look at this shocking discovery and whether you could be living in one of these ‘highballed’ neighborhoods too.
In general, property taxes are based on the local government’s assessment of a home’s value. However, real estate valuation is highly subjective and experts told ABC News that a tax assessment of a home could be misaligned with its fair market value.
It’s this subjective gap in valuation that’s unfairly impacting some communities. According to ABC’s analysis of ATTOM and U.S. Census Bureau data, homeowners who live in predominantly black or brown neighborhoods tend to pay higher taxes than their counterparts in predominantly white neighborhoods.
On average, a homeowner in a white neighborhood receives a property tax assessment that is 70% of their home’s fair market value. For owners in black or brown communities, the assessment is 80% on average.
“We tend to see then, African American and Latino communities are paying higher tax rates,” University of Chicago Professor Christopher Berry told ABC News7, explaining that the systematic overassessments could be the result of lower fair market values in these communities.
This heavier tax burden could be putting some vulnerable members of racialized communities at great risk of losing their homes. Like 70-year-old Baltimore resident Bonita Anderson, who lost her home in 2022 after falling behind on her property taxes by just $5,000. “I sat down and thought, ‘Oh my god, I’m 70 years old and I’m homeless,'” she told ABC News.
