As the property tax revolt reaches a fever pitch across the country, a new analysis points to an often overlooked person bearing the brunt of rising tax burdens: homebuyers.
The national push to lower property taxes has long centered on a familiar figure: longtime homeowners whose tax bills have climbed alongside home values, sometimes rivaling what they once paid for the mortgage itself.
But in 11 cities, new buyers face a property tax bill that is at least double what existing owners of comparable homes pay, based on an analysis conducted by the Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence.
“When house prices shoot up in cities with assessment limits, this can create a huge wedge between the property tax bills of recent homebuyers versus longtime homeowners,” explains Jake Krimmel, senior economist at Realtor.com®.
That wedge is largely driven by assessment limits, which cap how quickly a home’s taxable value can rise while the owner remains in place. The protection is meant to shield homeowners from being taxed on the full run-up in their home’s market value. However, when the home sells, the tax basis resets—leaving the next buyer with a much larger bill.
“Effectively, the longstanding homeowners end up paying heavily discounted property taxes, meaning they enjoy all of the capital gains benefits of rising property values without bearing the costs of owning more valuable real estate,” Krimmel says.
Where new buyers carry the highest relative property tax burden
While the impact is especially acute in 11 cities, the analysis found that new homeowners faced property tax bills at least 25% higher than comparable existing homeowners in 23 markets.
Across the 31 cities with parcel-specific assessment limits analyzed, the average ratio was 1.61—meaning new buyers pay 61% more in property taxes on average. In dollar terms, that amounts to just over $2,600 more per year for a new homeowner.
The largest divide is in Miami, where a newly purchased median-valued home comes with an estimated annual property tax bill of $10,024. That’s more than three times higher than the bill for a comparable home owned for the city’s average duration, which carries an estimated bill of $3,166—a difference of nearly $7,000 a year.
The difference is perhaps most visible in the effective tax rate—which shows the annual tax bill as a percentage of the home’s market value, making it easier to compare owners with similarly valued homes.
A new buyer in Miami pays an effective property tax rate of roughly 1.676% on a median-priced home, according to the study. But an owner of the same median-priced home who has been in place for the city’s average ownership duration of 13 years would pay an effective rate of just 0.529%.
That sizable difference is already showing up on the ground, according to Mick Duchon, a Miami-based real estate agent with The Corcoran Group.
“It absolutely tracks with what we’re seeing in South Florida,” he says. “The gap between a seller’s tax bill and what a new buyer will pay has become one of the most important and often most misunderstood parts of the deal.”
Duchon says he sees it most in neighborhoods where homeowners have stayed the longest—allowing them to benefit from years of capped increases.
“A seller might be paying taxes based on an assessed value from a decade ago, while a new buyer is effectively stepping into today’s market value,” he adds. “That reset can mean a dramatic jump, and in some cases, it meaningfully changes the true cost of ownership.”
And the effect is not limited to Miami, or even Florida for that matter.
California—where Proposition 13 limits annual assessment increases to just 2% unless a home is sold—accounts for five of the 11 cities where new buyers face property tax rates at least twice as high as average-tenure owners, including Los Angeles, San Diego, Long Beach, Oakland, and San Jose.
In San Jose, the dollar amount gap is even larger than in Miami. A newly purchased median-valued home carries an estimated tax bill of $16,119, compared with $7,941 for a comparable average-tenure home—a difference of $8,178 a year.
How different tax burdens are hitting the market
The tax gap is starting to change behavior on both sides of the transaction.
For buyers, the higher tax burden is stacked on top of other headwinds already making it hard to break into the market.
“For a buyer already stretching to make the numbers work at ~6% mortgage rates, an extra $400 to $500 a month in taxes they didn’t fully anticipate can be the difference between qualifying for the loan and getting priced out entirely,” explains Colton Pace, CEO and founder of Ownwell, a company that helps homeowners lower their homeownership costs.
That’s pushing some agents to treat projected taxes as an upfront affordability issue rather than a late-stage detail.
Pablo Alfaro, a Florida-based real estate agent with Compass, says he’s working with buyers in Miami to understand projected tax bills before submitting an offer.
“Buyers often look at the current tax bill as a baseline, and that can be misleading,” he explains. “We are now addressing it much earlier in the process. In many cases, before an offer is submitted, we walk buyers through a realistic projection based on the purchase price so they can fully understand their future carrying costs.”
Those high carrying costs may also be starting to tip the scales of pricing. A postsale tax reset can function much like a hidden rate buy-up: It doesn’t change the buyer’s mortgage rate, but in the most expensive markets, it can raise the monthly cost of ownership by hundreds of dollars.
But Krimmel says that steep competition may be muting these effects.
“Whether higher postsale tax burdens are effectively paid by the buyer or the seller depends on local supply and demand dynamics,” he explains. “In extremely desirable places to live—like most cities on the list—if inventories are low and sellers are in control, homes can still fetch high prices despite their larger property tax burden.”
Pace says that when the higher tax burden does get factored in, it often shows up as a hit to the seller—but that correction is uneven because many buyers don’t realize the size of the reset until they are already deep into the process.
“It’s usually the seller who absorbs it; the tax penalty effectively discounts the property’s value relative to what it would sell for in a state without assessment resets,” Pace says. “But that kind of correction happens slowly, not all at once.”
The larger distortion may happen before a home ever hits the market. For longtime owners, a low tax basis can become part of the value of staying put. Selling may mean giving up years of capped assessment growth and buying back into the market with a higher taxable value.
Krimmel says this is the more important market consequence of assessment limits.
“In addition to setting up an, arguably, inequitable system, assessment limits also have a distortionary effect on local housing markets,” he says. “Namely, they create an incentive for incumbent homeowners to stay put and never sell—a property tax lock-in effect.”
That lock-in effect can be especially strong for owners who might otherwise downsize, relocate, or trade into another home nearby. Even a smaller home can come with a higher tax bill if the new purchase resets closer to today’s market value.
Duchon says he sees that dynamic actively shaping behavior in Miami.
“Longtime homeowners are very aware that if they sell, they’re not just buying a new home—they’re resetting their entire tax basis,” he says. “For many, that creates a ‘stay put’ mentality, where the financial incentive to hold on to a favorable tax position outweighs the lifestyle motivation to move.”
But the effect is not automatic in every state with assessment limits.
The Lincoln analysis notes that Texas’ 10% assessment cap had a negligible impact in 2025, because market values had cooled enough for assessed values to catch up after the 2020 to 2022 price spike.
That suggests the biggest distortions emerge when three forces compound: homeowners stay put the longest, market values rise the fastest, and taxable values are capped aggressively below real market gains.
And it’s these markets where the burden spreads beyond the individual buyer.
A higher reassessed tax bill can reduce purchasing power on the way in and a protected tax basis can reduce listings on the way out. In places already short on inventory, both forces make the same problem harder to solve: fewer homes moving, fewer buyers able to stretch, and a widening divide between those who got in earlier and those trying to buy now.
