Everybody is looking for a break, and nothing sounds better to a homeowner than getting rid of property taxes. Recently, the conversation has shifted from a “what if” to a political talking point, with states like Florida exploring the total elimination of property tax. The logic is simple: “You bought the property; it should be yours.”
As a mortgage professional, I’d love to tell you this is right around the corner. It would immediately qualify a “gazillion” more people for homes and likely drive housing prices up instantly. But as we enter a new election cycle, we have to separate “sounds great” from “is possible.”
The Math Behind the Promise
To understand why this is such a difficult hurdle, you have to look at the numbers. In California, the most recent data from the Board of Equalization shows that property taxes generate roughly $95 billion in revenue.
Here is the breakdown of where that money goes:
- Education:Â Approximately $51 billion is dedicated to funding our schools.
- Local Services:Â The remaining billions fund fire departments, police, and local infrastructure.
Bridging the Gap
It is no secret that California has a spending problem. I would love to see massive chunks cut out of the state budget to provide relief to taxpayers. However, cutting $95 billion out of a budget is not a minor adjustment—it is a total overhaul of how the state functions.
If a candidate or a headline tells you they want to get rid of property taxes, your very next question should be: “How are you going to bridge the gap for our schools?”
Why the “Election Cycle” Matters
During an election year, things get weird. Candidates will say whatever it takes to earn your vote, and “No More Property Taxes” is a very effective hook. But unless there is a realistic plan to replace nearly $100 billion in revenue, it’s a promise that likely won’t be kept.
Be careful what you hear over the coming months. Property taxes aren’t going anywhere for the foreseeable future, and it is important to plan your real estate investments based on reality, not election-year “bullshit.”
Have questions about how property taxes affect your specific mortgage qualification? Let’s talk.