State and local governments saw property tax revenue grow in the first quarter, but the latest increase reflected a slowdown from the reported pace a year earlier.
The amount of property tax collected between January and March came in at $203.4 billion to start the year. The total surged 5.2% on an annual basis from first-quarter 2024 numbers of $193.3 billion.
Quarter over quarter, revenue increased by a seasonally adjusted 1.1% from $202.1 billion.The pace of growth, though, was cut almost in half from the 2.1% rate in the same three months in 2024.
“While this does show growth over the quarter, growth has notably slowed over the past year,” wrote researchers at the National Association of Home Builders in its analysis of U.S. Census Bureau data.
For calendar year 2024, property tax revenue surged 8.2% but the pace narrowed in later quarters, with the trend continuing into the first three months of 2025, the data showed.
While the impact of last November’s election may not show the full impact on state coffers yet, the pullback in growth comes after voters in several states voiced their support for measures that stood to lower property taxes in their jurisdictions.
An initiative to completely eliminate property taxes in North Dakota failed to pass.
How property tax revenue compares to other sources
Total tax collected by state and local governments stood at $538.3 billion. The amount grew 1.3% quarter over quarter and 5.8% on an annual basis.
Property taxes usually account for the largest percentage of collections revenue, and they made up 37.8% of the total in the first quarter. The share was near par with the full-year 2024 slice of 38%. The share was 37.9% over the same three-month period last year .
By comparison, first-quarter state and local sales taxes added up to $148.9 billion, representing 27.7% of revenue. Personal income taxes came in just behind with a 26.1% share, equivalent to $140.5 billion collected.
Making up the smallest portion was corporate income taxes, which totaled $45.4 billion and made up 8.4% of revenue.
Collected sales tax grew 0.9% from the fourth quarter of 2024. Individual income tax revenue saw an uptick of 0.2%. The corporate tax category saw the fastest pace of growth at 6.6%.
