Where Do Property Taxes Come From? The History of Property Taxes

Property Tax History Facts

Property taxes are the only major tax implemented in all 50 states. They are also the oldest imposed tax in the U.S. Have you ever wondered about the history of property taxes?

Where did they originate, how have they changed, and why do we still have them today? Read on for a brief history of property taxes in the United States.


Property Taxes in Ancient, Medieval, and Colonial History

Property taxes have been around almost as long as civilization. Ancient Egypt, Babylon, Persia, and China all had some form of tax on land and its potential to produce value.

These civilizations had tax assessors, too, whose job it was to collect the tax on this value. Taxation of property continued throughout medieval and colonial times. So did protesting this taxation.

In the eleventh century, the infamous Lady Godiva allegedly rode naked through the streets of Coventry to protest her husband’s excessive taxation on the tenants of his land.

King William III of England imposed a “window tax” in 1696 in effort to increase tax revenue. In response to this, many homeowners took to boarding up or camouflaging their windows in order to avoid taxation.


Property Taxes and the Revolutionary War

You probably know that unfair taxation was a driving reason behind the American Revolution—remember the Boston tea party? “No taxation without representation!” was the battle cry of the American colonists who wanted out of the British economic system.

According to the Economic History Association, taxes are one of the reasons America was able to rebel against Britain. A newly-formed nation can’t beat the world’s most powerful military without a little expendable income, and property taxes helped fund that.

The war led to steep increases in property taxes, however, and citizens demanded reform. They hadn’t fought to escape a nation that was overtaxing them just to be overtaxed by their newly formed one.


Property Taxes in Nineteenth Century America

Initially, most property was all taxed at the same rate. However, many citizens fought for property taxes to be determined based on value instead.

This was the basis of the appraisal system still used in America today. These reforms occurred gradually in the majority of states in the U.S. throughout the nineteenth century.

Property tax was considered the fairest way to tax citizens on the money needed for public services. Income tax was not a practical option, and many Americans lived in rural areas where sales tax would not generate enough revenue.

Americans spread out across the country, forming counties, communities, and districts to administer the necessary services. This made local property taxes the most practical option for taxation.

Property taxes were based on property value and the offerings of the communities and counties surrounding the property. This meant that every land-owning citizen paid his part of the cost of these services in proportion to the appraised value of his property.

In other words, both the rich and the poor paid the same percentage, not the same amount.


Property Taxes in Twentieth Century America

The role of property taxes had to be re-evaluated in the twentieth century. Ownership of property was a solid determiner of a person’s wealth and capacity to pay taxes in the nineteenth century.

In the twentieth, however, wealth became a more intangible concept. Wealthy bankers may own little valuable property, while farmers own a lot more, but the latter most likely has less wealth.

The National Tax Association formed in 1907 and proposed state income taxes as an alternative source of revenue. They advocated for standardized appraisals of property to be performed by trained professionals.

Each state enacted its own reforms separately. This was in effort to equalize taxation and provide necessary assistance or exemption for the poor, the elderly, veterans, and individuals with disabilities.

Property taxes allowed for the development of many important community services. Without them, developing American communities would not have been able to provide water services, irrigation, roads, parks, libraries, fire departments, public health services, and much more.

However, as taxes rose and fell and rose again throughout the twentieth century, Americans got fed up. Some lost their homes because steeply increasing home values left them unable to pay their taxes.

Tax protests took place all over the nation as Americans fought to make their voices heard.


Property Taxes in America Today

Many of the provisions and standards Americans fought for in the last hundred years are available today. State governments generally fund more of the cost of public education than they did before, easing the burden on local governments.

Appraisal of property is more accurate, uniform, and fair. Special consideration is given to the individual who owns the property. However, where there is room for exceptions, there is room to abuse those exceptions.

Taxation of property is not a perfect system. As long as citizens continue to advocate for a better, fairer system, however, the more likely it is to continue improving.


Property Taxes in Texas

Property taxes provide Texans with public schools, road maintenance, parks and recreation, police, emergency services, libraries, and the local government who administrators all of this.

Rates of property taxes today vary a lot state by state. The state with the lowest property taxes is Hawaii, with property taxed at just 0.28 percent of a building’s appraised value. The state with the highest is New Jersey, with a rate of 2.19 percent.

Unfortunately, Texas is on the higher end of the spectrum with rates at 1.94 percent, making it the fourth highest rates in the country, according to SmartAsset.com.

These rates, combined with soaring home appraisal values, make it difficult for many Texans to pay their property taxes. The same conditions that caused some to lose their homes in the twentieth century are happening again today.

About the Author: Direct Tax Loan is the largest online platform in the United States that connects top property tax lenders with residential and commercial borrowers. Regardless of where you are located in the state of Texas or Nevada, we’ll be thrilled to connect you with reputable lenders and help you pay off your property tax bill.

About the Author
Gered Ford
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