For decades, state lawmakers have tinkered around the edges of property tax reform, capping increases, compressing rates, and carving out relief for the most burdened of homeowners. But in 2026, at least five state legislatures are throwing that playbook out and moving to eliminate property taxes outright.
A mix of election-year pressure, swelling assessments, and an affordability crisis that’s squeezing long-tenured homeowners on fixed incomes is fueling a bold new wave of proposals. The plans vary in structure and ambition, but they share one thing: a belief that it’s time to fundamentally rethink how states fund public services and who’s footing the bill.
“Some of these states, namely Texas, have high property tax rates that are unpopular among voters, especially when the state runs a budget surplus nearly every year,” explains Joel Berner, senior economist at Realtor.com®. “The rest have all seen major increases in the taxable value of homes that are leading to higher property tax burdens.”
It’s that tension that’s now pushing states to test just how far voters and budgets are willing to go.
ND eyes oil and tax savings/credits
Of all the states experimenting with property-tax abolition, North Dakota has moved furthest toward a workable funding model.
Gov. Kelly Armstrong has outlined a plan that would commit roughly $483 million from the state’s general fund, plus future earnings from the oil-tax savings account, to offset property tax cuts and credits.
“This plan is aggressive, durable, and responsible,” he told lawmakers.
The proposal builds on the state’s primary-residence tax credit, delivering up to $1,550 in initial annual relief per household. That credit would increase every two years and gradually rely more on oil-tax earnings over time, while a 3% cap on annual growth in local property-tax budgets limits future increases.
When paired with an expanded property-tax credit for income-eligible seniors and people with disabilities, Armstrong argues the plan would “eliminate property taxes for an entire class of homeowners who need that relief the most, and it would put the bulk of primary residences on a path to zero within the next decade.”
That could make a significant difference for North Dakota homeowners under pressure. The state’s median home price is about $342,400, and the median property tax bill tops $3,000 a year, according to data from Realtor.com.
Georgia, Florida battle for ballot
But not every state has the luxury of oil and gas windfalls to fund bold tax experiments. And further south, Georgia and Florida are battling in the state legislature to approve ballot initiatives that would end property taxes while scrambling to find alternative funding sources.
In Georgia, Republican legislators, including state Rep. Jon Burns, have backed a plan to eliminate most homeowner property taxes by 2032. The proposal would begin with a $1 billion state outlay to reduce current property tax burdens, followed by a dramatic raising of the exempt value of primary residences from $5,000 to $150,000 in 2031, and eliminating most property taxes the next year.
To replace the revenue, homeowners would be billed directly by their local government for services like garbage pickup, stormwater control, and fire protection, while any government or school improvements would need to be approved by voters.
But that swap comes with heavy baggage. Sales taxes are more volatile than property taxes and vary widely by region and economy, as shown by Florida.
While momentum has been building since early 2025 to eliminate property taxes on homesteads in the Sunshine State, replacing the lost revenue would require lawmakers to nearly double the statewide sales tax rate—from an average of 7.02% to a staggering 15.34%—just to offset the shortfall, not including the likely behavioral changes that would erode collections further, according to an analysis from the Tax Foundation’s Jared Walczak.
Still, state lawmakers floated more than seven different proposals last year aimed at softening or phasing out property taxes, mostly focused on primary residences.
But Gov. Ron DeSantis has pumped the brakes on this “throw everything at the wall and see what sticks strategy.” Rather than backing multiple bills, he’s urged lawmakers to consolidate their efforts behind one clearly defined ballot initiative that stands a real chance with voters, even teasing the possibility of a special session.
Texas takes aim at school funding
Meanwhile, in Texas, Gov. Greg Abbott has made eliminating school property taxes a marquee issue heading into the 2026 election.
While lawmakers passed a series of tax relief measures in 2023 and 2024, including rate compression and homestead exemptions, Abbott has repeatedly said those changes don’t go far enough.
“Every single year, you, my constituents, keep saying our property taxes are too high,” Abbott told supporters at a campaign stop in late 2025. “We have to do more to lower them.”
Abbott has floated a long-term plan to use state surpluses to buy down school property taxes until they can be phased out entirely. But so far, a clear road map to replace the lost education funding remains elusive.
Still, with the governor’s backing and broad support from conservative voters, the idea has become a central talking point and a test of whether one of the largest and most complex school funding systems in the country can be reimagined.
Indiana joins the fray
Indiana is also joining in, throwing its weight behind full-scale property tax repeal. In a post on X, Lt. Gov. Micah Beckwith positioned eliminating property taxes as his top priority for the 2026 legislative session.
He’s backing House Bill 1288, one of the most sweeping proposals in the country. The bill would abolish the assessment of tangible property after Dec. 31, 2026, and end property tax collection entirely beginning in 2027.
To offset the billions in lost revenue that currently fund local services, HB 1288 proposes broadening Indiana’s sales and use tax to include most services—everything from legal fees to haircuts—and redistributing that revenue through a local government sharing fund.
‘Zero’ slogans, budget realities
For every bold promise to eliminate property taxes, there’s an inescapable fiscal truth: Property taxes account for 70% of local revenue, 90% of school funding, and 25% of all state and local tax revenue in aggregate, according to Billy Hamilton, deputy chancellor emeritus, Texas A&M University.
Replacing that revenue requires a level of long-term financial engineering that few lawmakers have fully worked out.
Even in proposals that bank on redirection of general fund dollars or dividends from oil tax savings, the math remains stubborn: Property taxes are unusually stable and predictable. Sales and income tax revenues, by contrast, are more volatile, especially during economic downturns.
That’s why the most ambitious plans are also the most fraught. Eliminating property taxes means either slashing services, shifting the burden to more regressive taxes, or hoping for a level of economic growth and political consensus that rarely holds over time.
And that tension is already surfacing. As one-time relief packages give way to permanent elimination plans, voters will have to decide not just whether they want lower taxes, but whether they’re comfortable with what gets cut to make that happen.
Soon, we’ll spotlight the citizen-led movements pushing similar goals from the ground up. In many states, it’s not just lawmakers driving this shift but the voters themselves.
https://www.realtor.com/advice/finance/lawmakers-eliminating-property-taxes-2026/
