Boomers are revolting against property tax, but abolishing it could weigh heavily on millennials and Gen Z. How to navigate high homeownership costs

Because many older homeowners live on fixed incomes, it’s understandable why more baby boomers are calling for the abolition of property taxes.

"Representatives aren't even willing to talk to us about the problem," Brian Massie with Citizens for Property Tax Reform in Ohio, recently told Business Insider (1).

"Then we're going to have to starve the beast, and that's the expression we use — starving the beast. We said, 'We're going to get a citizens-led initiative to abolish all Ohio property taxes.'"

But is getting rid of property taxes the wisest move? And what would such a dramatic change mean for local funding and younger demographics?

How property tax divides and defines generations

No matter the tax, nobody likes paying it. But if there is a positive feature of property taxes, it’s that they’re easy to understand.

Aside from nuances in certain locales, you just have to multiply the current tax rate by the current assessed value of property.

This model wasn’t such a big deal when boomers entered the housing market. Not only were home prices cheaper, older boomers were coming into their prime earning years when prices did start to rise after the 1970s.

But today’s environment is putting a strain on the straightforward property tax model. Skyrocketing home prices, inflation and fixed incomes create the perfect storm for an uptick in frustration.

And sure, the increase in home values looks great on paper, but real estate is illiquid. Boomers can only realize their gains if they choose to sell. In the meantime, they’re strapped with higher expenses on top of the higher cost of living.

While these grievances are understandable, property taxes remain the lifeblood of the local American economy. According to the Tax Foundation (2), in 2022, property taxes, which help fund schools, roads, police stations, fire departments and other essential services, comprised more than a quarter (22.7%) of total tax collected at the state or local level — more than any other source.

If homeowners weren’t to pay for these services, via taxes, who would?

Municipalities would have to replace this revenue in ways that can hurt younger generations, including higher sales and income taxes or simply reducing services.

As Jared Walczak, vice-president of state projects at the Tax Foundation recently noted in an interview with Business Insider (1), “property taxes generate about 70% of all local tax revenue nationwide” and “in many states, it's 80% or 90%, or even higher,” adding that “replacing the property tax is virtually impossible in most states, at least without causing substantial economic harm.”

Millennials and Gen Zers already struggle to break into the housing market. According to a recent report by National Association of Realtors (3), the average age for a first-time homebuyer is now at its highest ever: 40. All the while, younger buyers are also dealing with a competitive job market and growing student loan debt.

There’s no knowing how this property tax debate will play out, but one thing’s for sure: It’s bringing simmering issues over housing inequality to the surface.

How to navigate property taxes without panic

There’s no telling if, when, or how property taxes will change, but they probably aren’t disappearing overnight. So, instead of betting that these taxes will go away, it’s far wiser for homeowners or homebuyers to factor them into their financial decisions.

For boomers, that means calculating the latest property tax using local rates on their county assessor’s office or tax collector’s website and their home’s current value. Consider using a money management app to factor in this expense and figure out creative ways to reallocate funds.

But that doesn’t mean boomers are stuck with whatever their property tax rates are. There are possible discounts that can help seniors or long-time homeowners.

For instance, consider exploring homestead exemptions (4) or tax deferral programs (5), both of which can offer temporary relief. If someone thinks their home’s value is overestimated, they can schedule a property reassessment to potentially bring down their tax.

Although homeowners can’t change the property tax rate, it’s possible to file a petition on the assessed value of their home with a local Board of Equalization or Board of Assessment Appeals. The more evidence you have — such as recent sale prices of similar homes, photos of condition issues, and a private appraisal — the better chance of lowering your assessed value and the total amount paid in property tax.