Are You Overpaying on Property Taxes? Nearly Half of Homeowners Might Be
Property taxes are one of those unavoidable costs of homeownership right up there with insurance and maintenance. But here’s something many homeowners don’t realize: there’s a good chance you might be paying more than you should.
A recent analysis from Realtor.com found that about 40% of homes in the U.S. may be overassessed for property taxes, meaning the assessed value used to calculate the tax bill is likely higher than the home’s actual market value. If that’s the case, homeowners may have the ability to appeal their tax assessment and lower their annual bill.
And the potential savings aren’t small. The report estimates the median homeowner could save around $539 per year by successfully protesting an inaccurate assessment—more than 15% of the typical property tax bill.
Why Property Taxes Are Rising
Across the country, property taxes have been creeping upward alongside home values. In 2024, the median U.S. property tax bill reached about $3,500, an increase of roughly 2.8% from the year before.
Higher home values are one reason, but they’re not the only factor. In some areas, local governments have also raised tax rates to fund services like schools, roads, emergency services, and municipal budgets.
Because tax systems vary widely from state to state—and even city to city—it’s possible for tax bills to rise even if a home’s assessed value stays the same.
Where Homeowners May Be Overpaying the Most
The Realtor.com analysis found some states have particularly high numbers of homes that may be overassessed. In a few states, nearly half of homeowners could potentially benefit from challenging their property tax bill.
For example:
- Texas: about 51% of homes may be overassessed
- South Dakota: about 48%
- California: about 48%
- Iowa: about 47%
- Illinois: about 46%
In Iowa specifically, the analysis estimates homeowners who successfully protest their tax assessment could save around $369 per year on average.
Why Many Homeowners Never Appeal
Despite the potential savings, most homeowners never challenge their property tax bill. Many people simply don’t realize they have the right to appeal, while others assume the process is complicated or only worthwhile for large properties.
In reality, tax assessments are not perfect. Counties may rely on outdated data, incorrect property details, or comparable sales that don’t accurately reflect your home’s condition or value.
How to Check if Your Property Taxes Are Too High
If you suspect your home might be overassessed, there are a few simple steps homeowners can take:
1. Review your assessment notice
Check the value the county assigned to your property and compare it to recent sales of similar homes nearby.
2. Look for errors
Incorrect square footage, outdated renovations, or missing property details can lead to inflated assessments.
3. Gather comparable sales
Recent sales of similar homes are often the most persuasive evidence in a tax appeal.
4. File an appeal before the deadline
Every jurisdiction has a specific window to protest your assessment, so timing matters.
A New Tool to Help Homeowners Check
To make the process easier, Realtor.com recently launched a new feature that allows homeowners to compare their home’s assessed value with similar properties and gather supporting data for a potential tax appeal.
The tool can generate a report with comparable sales and assessment data that homeowners can use when filing a protest with their local tax authority. Get the tool HERE.
The Bottom Line
Property taxes may be unavoidable, but overpaying them doesn’t have to be.
With rising home values pushing tax bills higher across the country, it’s worth taking a closer look at your assessment. If the numbers don’t add up, filing a property tax appeal could potentially save you hundreds of dollars a year.
And in today’s housing market, a little extra money staying in your pocket never hurts.
