Extreme weather, skyrocketing homeowners insurance premiums, rising condominium ownership and maintenance fees . . . add property taxes to the list of housing pressures that make living in (and moving to) Florida a headache for many homeowners.
New analysis by Redfin indicates Florida is home to three of the top-five U.S. metros where property taxes on single-family homes have increased the most since the onset of the COVID-19 pandemic.
Property taxes rose the most in Indianapolis, where the typical homebuyer now pays $205 a month on taxes – 66.7% more than they would have in 2019. Atlanta came in second, with a 65.8% increase to $239. Next were three Florida metros: Jacksonville, where property taxes have increased 59.6% to $228 since 2019; Tampa (56.7% to $250); and Miami (48.1% to $367).
Home buying in general has become more challenging in Florida over the past five years, for myriad reasons. Home values and sale prices have skyrocketed in part due to the pandemic-driven homebuying boom in the Sunshine State, Redfin analysts noted in their report.
Perhaps most impactfully, natural disasters – especially hurricanes and flooding – have increased in frequency and severity over the last decade, pummeling Florida.
Nearly one-third of U.S. residents ages 18-34 who responded to a Redfin survey indicated that they are reconsidering where they would move in the future after seeing or hearing about the impacts of Hurricane Helene, which caused an estimated $47.5 billion in property damage when it hit the peninsula this September.
Housing demand has been weakening along Florida’s coastline as homeowners insurance and homeowners association (HOA) costs skyrocket due to increasing climate disasters.
As a result, Florida has increased property tax rates to invest in climate-resiliency projects. State governments in Florida and Texas rely on property taxes to fund large projects, due to the fact they don’t have state income taxes.
“Florida was alluring for remote workers during the pandemic because of its relatively affordable housing,” commented Elijah de la Campa, a senior economist at Redfin. “Somewhat ironically, the state’s population boom has driven up home prices, and property taxes along with it. The cost of owning a home has gone from affordable to unaffordable for a lot of local Florida residents and out-of-towners. Home prices that are much higher than in pre-pandemic times and the disaster-driven surge in HOA and insurance costs are now pricing homebuyers out of the market."
The state’s population has also risen, increasing demand for government services and leading municipalities to raise taxes. Among U.S. counties with a high share of homes facing fire or flood risk, Florida is home to six of the top 10 with the highest net inflows.
Nationwide, monthly property taxes have increased in 48 of the 50 most populous metros since 2019, at an average rate of 30% and reaching a monthly median of $250.
"The increase in property taxes is the last straw for some prospective buyers," de la Campa added. "Homebuyers have realized they may save money by paying no income tax, but their property tax bill will increase.”
Effective property tax rates are highest in Texas, lowest in the Sun Belt and California, according to Redfin’s data.
