Rising Property Taxes? Here's How It Impacts Your Mortgage Planning

Property taxes are one of the most overlooked components of home affordability. While mortgage rates often grab headlines, rising property taxes can quietly raise your monthly housing expenses and even affect how much house you can qualify for. Property taxes are a crucial component of homeownership costs. When these taxes increase, they can lead to higher monthly mortgage payments, especially for those with escrow accounts that bundle property taxes and insurance with mortgage payments. This escalation can strain household budgets and affect long-term financial planning.

Brizzi Financial is licensed in California, Idaho, Texas, Alabama, and Florida — and we’re closely watching how rising property taxes are affecting homeowners and buyers in these states. While this article gives an update on property taxes in these states, if you own property elsewhere we encourage you to look up the latest updates in your area to make the best possible financial decisions for your home and mortgage.

Why Property Taxes Matter in Mortgage Planning

Property taxes are assessed annually based on your home’s assessed value, and the rate is set by your local government. When property values go up — or if the tax rate increases — you’ll end up paying more, even if your mortgage payment stays the same. For buyers, this means your lender will factor in these rising taxes when calculating your debt-to-income ratio, which can limit your purchasing power.

What Should Homeowners & Buyers Do?

Review your property tax bill annually and look for changes.
Review Your Escrow Statements: Regularly check your mortgage escrow statements to understand how property tax increases affect your monthly payments.
Request a reassessment if you believe your property was overvalued.
Consult a mortgage advisor before refinancing or buying a new home.
Use a tax estimator tool to understand your total monthly housing cost.
Explore Exemptions: Investigate if you qualify for homestead exemptions, senior citizen discounts, or other local tax relief programs.
Budget Accordingly: Anticipate potential increases in property taxes when planning your annual household budget to avoid financial surprises.

Now, let’s take a quick look at what’s happening in the five states where Brizzi Financial is licensed:

California Property Taxes in 2025

California has long benefited from Prop 13, which caps property tax increases. Prop 13 caps property tax rates at 1% of the assessed value, with annual increases limited to 2%. However, additional local taxes and assessments can raise the effective rate.

In 2025, homeowners are experiencing higher tax bills due to increased property values and new local levies.But as home values skyrocket, especially in areas like the Bay Area and Southern California, even those capped increases are becoming significant. For new buyers, property taxes are based on current market value, which means your neighbor who bought 10 years ago might pay thousands less than you — for the same house.

Higher property taxes = higher escrow payments and potentially less room in your budget for other expenses.

Property Taxes in Idaho

In Idaho, rising home values have led to increased property assessments. With an effective property tax rate of approximately 0.44%, Idaho remains one of the states with lower property taxes. Nonetheless, rising home values have led to increased tax assessments, impacting homeowners' monthly expenses. Cities like Boise have seen sharp appreciation over the past few years, and many homeowners are now dealing with property tax hikes. First-time buyers may also face higher qualifying thresholds. If you’re planning to buy or refinance, it’s essential to factor in these costs early.

Texas: No Income Tax = Higher Property Taxes

Texas has no state income tax — but makes up for it with some of the highest property taxes in the country. Property values in cities like Austin and Dallas have surged, and taxing authorities are adjusting assessments accordingly. Even if you lock in a low mortgage rate, your monthly housing costs could jump unexpectedly due to tax increases. Talk to your mortgage advisor to be sure your escrow account is prepared. In 2025, legislative efforts aim to provide relief to seniors and disabled residents by increasing homestead exemptions, potentially reducing their tax burden significantly.

Alabama Property Taxes Are “Low,” but…

Alabama boasts one of the lowest property tax rates in the nation, around 0.41%, but some counties are now reassessing property values to keep up with growth and inflation. While your taxes may still be lower than in other states, increases can still affect affordability — especially in rapidly growing areas like Huntsville or Birmingham. Local policies vary, so double-check with your county assessor.

If You Own More Than One Home In Florida, Pay Attention to This

Florida’s homestead exemption helps many primary homeowners reduce their tax bills, but rising property values are still increasing tax obligations. Florida's property tax rate stands at approximately 0.76%. The state's growing population and rising property values contribute to higher tax assessments, influencing overall housing affordability. South Florida and parts of Central Florida are seeing higher tax assessments across the board. Homeowners with more than one property and investors need to pay close attention, as second homes don’t qualify for the same exemptions — making those tax bills even steeper.

We Have Your Back!

Rising property taxes in 2025 present challenges for homeowners across various states, impacting mortgage planning and housing affordability. By staying informed and proactive, homeowners can mitigate the financial impact and make strategic decisions to manage their housing costs effectively.

At Brizzi Financial, we help homeowners plan smarter. We look at the full picture — including how property taxes impact your long-term financial health. Whether you’re buying your first home, relocating, or looking to refinance, reach out to our team for personalized guidance. Connect with us to schedule a consultation call.