University of Wisconsin–Madison

Property Tax Circuit Breakers in 2019

Type Policy Brief or Report
Year 2019
Level State
State(s) All States
Policy Areas Economic Justice
Residential property taxes are regressive, requiring low-income taxpayers to pay more of their income in tax than wealthier taxpayers. In order to make residential property taxes more affordable, state lawmakers can pursue a “circuit breaker” approach, in which taxpayers earning below a certain income level are given some amount of property tax relief when their property taxes exceed a designated percentage of their income. This policy brief surveys the advantages and disadvantages of the circuit breaker approach to reducing property taxes. In particular, circuit breakers are less expensive than “across the board” property tax breaks and offer an “ability to pay” criterion that other property tax reforms lack. However, they are only given to taxpayers who apply for them and are frequently underutilized.

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