American taxpayers could see some relief property taxes in the future, as at least five states are considering eliminating property taxes entirely, which could force states and localities to turn to other sources to fund key public services.

An analysis by Realtor.com broke down the effort to eliminate property taxes in five states and noted that some of the proposals are more developed than others in terms of finding a replacement for lost tax revenue to avoid straining state and local budgets.

Property taxes provide a key source of revenue for state and local governments, accounting for 90 percent of school funding, 70 percent of local revenue and 25 percent of all state and local tax revenue combined, according to Billy Hamilton, vice chancellor emeritus of Texas A&M University.

While they play a key role in state and local finances, they can also pose a challenge to the affordability of homeownership, especially for Americans who live on fixed incomes and can face large payments when taxes are due.

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Here are the ongoing state efforts to reduce or eliminate property tax burdens that were detailed in the Realtor.com report:

North Dakota

State capitol building in Bismark, North Dakota. (Getty Images)

The Republican governor of North Dakota. Kelly Armstrong has proposed using about $483 million from the state’s general fund along with future revenue from the state’s oil tax savings account to offset property tax cuts and credits over time with the goal of eliminating them for most homeowners within a decade.

Armstrong’s plan would start by expanding an existing tax credit for primary residences, reducing property tax bills by up to $1,550 per year per household.

From here it would increase every two years with more income from the oil tax savings account offsetting the change, while limiting annual increases in local property taxes to 3%. Other relief would come from expanding a property tax credit for seniors who meet income limits, as well as people with disabilities.

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Georgia

An aerial view shows the downtown skyline from Piedmont Park on May 15, 2024 in Atlanta, Georgia. Atlanta is one of the host cities for the 2026 World Cup. (Alex Slitz – FIFA/FIFA via Getty Images)

A proposal by state GOP lawmakers would eliminate most property taxes by 2032, and the effort would begin with a $1 billion spending spree from state government to lower current property taxes. It would also increase property tax exemptions for primary residences from $5,000 to $150,000 in 2031, with most property taxes eliminated the following year.

Local governments would then make up the lost revenue by billing property owners for services such as trash collection, stormwater control, and fire protection. The proposal would require voter approval for other improvements, such as those of government infrastructure or schools.

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Florida

Republican Gov. Ron DeSantis has pressed lawmakers to rally behind a package the state can bring to Florida voters. (Jeffrey Greenberg/UCG/Universal Images Group via Getty Images)

Florida policymakers have been debating property tax elimination or relief measures for about a year, with more than a half-dozen proposals discussed in the past year that would eliminate or ease property taxes on primary residences.

Republican governor. Ron DeSantis has pressed lawmakers to rally behind a package the state can put to Florida voters.

To illustrate the challenges of replacing lost property tax revenue, an analysis by the Tax Foundation found that replacing lost property tax revenue with higher sales taxes would require raising the sales tax rate from an average of 7.02% to 15.34%. The nonpartisan think tank also noted that it could underestimate the deficit as taxpayer behaviors change.

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Texas

View of Austin, the capital of Texas. (iStock)

Republican governor. Greg Abbott is trying to eliminate school property taxes after enacting several measures aimed at easing property tax burdens in recent years, including rate compression and property exemptions.

Abbott has proposed using surplus funds from the state budget to reduce school property taxes for a period of time until they are eliminated. However, lawmakers are still debating a long-term solution to replace lost education funding.

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Indiana

The skyline of Indianapolis, Indiana. (Getty Images)

Indiana’s HB 1288 would abolish taxes on tangible property after December 31, 2026, while eliminating property taxes entirely by 2027.

The proposal would seek to recoup lost tax revenue by expanding Indiana’s sales and use taxes to cover most services, and the proceeds of this move would be redistributed through a local government shared fund.