Common Property Tax Myths Debunked

16 December 2025

Property taxes—just hearing the term can make some homeowners cringe. They’re an unavoidable part of owning real estate, yet they’re often misunderstood. Misinformation spreads like wildfire, leading people to make costly mistakes or miss out on potential savings.

So, let’s cut through the confusion and tackle the biggest property tax myths head-on. By the end of this guide, you'll have a clearer understanding of how property taxes actually work—without the myths clouding your judgment.

Myth #1: Property Taxes Only Go Up

Many people believe that property taxes can only increase, never decrease. While it’s true that taxes tend to rise over time, they don’t automatically go up every year.

The Truth

Property taxes are based on two main factors:
1. Your home’s assessed value
2. The local tax rate set by your municipality

If the housing market declines or local governments adjust tax rates downward, your property taxes can decrease. In some cases, homeowners can also appeal their property assessments, which may result in a lower tax bill.

So next time you get your tax bill, don’t assume it will always be higher than the year before. There’s always a chance it could go the other way.

Myth #2: Property Taxes Are the Same for Every Homeowner in a Neighborhood

Ever wonder why your neighbor with the same house pays lower property taxes than you? Some homeowners assume there’s a universal tax rate applied evenly, but that’s not the case.

The Truth

Property taxes are calculated individually based on a home’s assessed value. Even in the same neighborhood, homes can have different assessments due to factors like:
- Renovations – If you’ve upgraded your kitchen or added a deck, your home's value (and potentially your taxes) could increase.
- Purchase price – If you bought your home recently, your tax assessment might reflect a higher market value.
- Exemptions or discounts – Some homeowners qualify for tax breaks, such as homestead exemptions, that lower their overall bill.

So, just because your neighbor pays less doesn’t mean you’re being overcharged—it just means your circumstances are different.

Myth #3: A Higher Assessed Value Means Higher Property Taxes

It’s easy to panic when you see your home’s assessed value go up. Many homeowners believe that a higher home value automatically means a bigger tax bill.

The Truth

While assessments do play a role in property taxes, they’re only one piece of the puzzle. The actual tax rate set by your municipality is just as important. In some cases, a city might lower tax rates even if home values rise, balancing things out.

Additionally, some areas reassess properties less frequently, meaning your home’s value may jump significantly in a reassessment year—but that doesn’t necessarily translate into a massive tax hike.

So, before stressing over an increased assessed value, check whether local tax rates have changed. Your bill might not be as bad as you think.

Myth #4: Property Tax Assessors Want to Raise Your Taxes

Some homeowners assume assessors are out to get them—seeing them as agents looking for reasons to jack up taxes unfairly.

The Truth

Assessors don’t set tax rates; they simply determine a home’s value based on market data. Their job is to ensure fair and accurate valuations so that taxes are distributed evenly among homeowners.

If a home’s assessed value increases, it's because comparable sales in the area justify the change—not because the assessor wants more money from you. That said, mistakes do happen, which is why appealing an assessment is always an option.

Myth #5: You Can’t Fight Your Property Tax Assessment

Think you’re stuck with your property tax bill, no matter how unfair it seems? Many homeowners assume they have no way to fight back, but that’s far from the truth.

The Truth

Most municipalities allow homeowners to appeal their property tax assessments if they believe their home has been overvalued. The process typically involves:
- Reviewing your home’s assessment report for errors
- Comparing your assessment to similar homes in the area
- Providing evidence—like recent sales data or an independent appraisal—to support your claim

If your appeal is successful, you could see a reduction in your property tax bill. It’s worth looking into, especially if your home’s assessment seems inflated compared to nearby properties.

Myth #6: Seniors and Veterans Don’t Have to Pay Property Taxes

You may have heard that seniors or military veterans are completely exempt from paying property taxes. While tax breaks do exist for these groups, they’re not usually a blanket exemption.

The Truth

Many states and local governments offer property tax relief programs for seniors, veterans, and disabled homeowners. These may include:
- Exemptions – A portion of the home’s value may be tax-free.
- Deferrals – Some areas allow seniors to postpone property tax payments until they sell the home.
- Rate reductions – Special programs may lower tax rates based on income level or other factors.

However, these benefits vary widely by location. If you or a family member qualifies for an exemption, check with your local tax authority to see what programs are available.

Myth #7: Paying Off Your Mortgage Means No More Property Taxes

Wouldn’t it be great if paying off your home also meant an end to property taxes? Unfortunately, that’s just wishful thinking.

The Truth

Property taxes aren’t tied to your mortgage—they’re a separate, ongoing expense. Even if you own your home outright, you’ll still receive a property tax bill every year.

When you have a mortgage, lenders often include your property taxes in your monthly mortgage payment and pay them on your behalf. Once the mortgage is gone, it becomes your responsibility to pay them directly.

So, while eliminating your mortgage reduces your housing costs, you’ll still need to budget for property taxes long-term.

Myth #8: Property Taxes Only Fund Schools

Some homeowners assume their property taxes only go toward funding local schools. When school budgets increase, they worry their property taxes will skyrocket.

The Truth

While a portion of property taxes does go to schools, they also support a variety of essential public services, including:
- Fire and police departments
- Road maintenance and infrastructure
- Public parks and libraries
- Garbage collection and sewage systems

Your property taxes help keep your community running, funding the critical services that keep neighborhoods safe and livable.

Final Thoughts

Property taxes can be confusing, but they don’t have to be a mystery. If you’ve ever worried about rising assessments, unfair tax rates, or hidden costs, hopefully, this guide has provided some clarity.

The next time you hear a property tax myth floating around, you’ll have the knowledge to separate fact from fiction—and maybe even save yourself some money in the process.