Mandy
Kansas is witnessing a major shift in its property tax burden, and homeowners are feeling the pressure. Over the past several decades, rising home values, stagnant commercial property assessments, and multiple tax exemptions have gradually transferred more responsibility onto residential property owners.
Today, families are paying a significantly larger portion of taxes that fund schools, roads, police, fire departments, and other essential public services.
This article explains how this imbalance developed, what factors caused it, and what possible solutions lie ahead.
How the Property Tax Shift Happened in Kansas
The current tax landscape did not change overnight. It is the result of policy decisions dating back nearly 40 years.
Statewide Reappraisal in the 1980s
In 1985, the Kansas Legislature approved a statewide reappraisal of all real estate. Updated property valuations were implemented in 1989. Many properties had not been reassessed for years — some even decades — leading to serious inequalities in valuations and tax bills.
In 1990, Kansas voters approved a constitutional amendment establishing different assessment rates:
- Residential property: 11.5% of appraised value
- Commercial property: 25% of appraised value
Although commercial properties are taxed at more than double the residential rate, market forces have significantly altered the balance over time.
The Dramatic Flip in Tax Burden
After these reforms, residential property owners in 1997 paid about 38% of total statewide property taxes, while commercial and other classifications covered 62%.
Fast forward to 2024:
- Residential owners now pay 57% of all property taxes
- Commercial and other property owners pay 43%
This represents a major reversal in the tax structure.
Three Major Causes Behind the Shift
1. Property Tax Exemptions
Tax exemptions have steadily reduced the commercial tax base.
In 2006, Kansas exempted newly purchased commercial and industrial machinery and equipment from property taxes. Businesses began investing in equipment that would remain permanently exempt.
Additional exemptions include:
- Certain business machinery
- Boats
- Personal property
- Economic development exemptions
- Industrial Revenue Bond (IRB) projects
Commercial properties built with IRBs or granted local economic development incentives can avoid property taxes for up to 10 years.
While such exemptions may encourage economic development, they also reduce tax revenue and shift the burden onto non-exempt residential property owners.
2. Special Treatment for Commercial Appeals
If a commercial property owner successfully reduces their valuation through a county appraiser or the Kansas Board of Tax Appeals, that reduced value remains in place for two additional years.
Residential property owners do not receive this benefit. This policy has created what experts describe as “statutorily stagnant commercial values.”
3. Rapid Growth in Home Prices
Kansas home prices have surged dramatically.
- Median home sale price in 2016: $159,000
- Median home sale price in 2024: $305,000
That is nearly a 100% increase in eight years.
Meanwhile, commercial loan values — a key indicator of commercial sales activity — have grown at roughly half that pace.
Low housing supply, high demand, higher construction costs, and historically low interest rates fueled this residential boom. As property values rise, so do assessed values, increasing tax obligations for homeowners.
Current Measures Limiting the Gap
Two recent factors have prevented the disparity from becoming even worse:
Undervalued Residential Appraisals
In 2024, the median appraised value of residential properties was lower than the median sale price in all 105 Kansas counties. This means homes are currently assessed below full market value.
State law requires property appraisals to remain within 10% of market value, preventing major discrepancies.
Residential Property Tax Exemption
Kansas homeowners receive a property tax exemption of up to $172.50 per residential property.
This exemption increased from $46 in 2021 to its current level.
Without these measures, homeowners would shoulder an even larger percentage of the total tax burden.
Proposed Solutions to Narrow the Gap
Addressing the imbalance would likely require legislative or constitutional changes.
Increase Residential Exemptions
Raising the $172.50 exemption could reduce residential tax bills. Lawmakers could also introduce:
- Circuit breaker programs
- Means-tested rebates
- Refund mechanisms for lower-income homeowners
Lower Residential Assessment Rates
Reducing the 11.5% residential assessment rate is another option.
Colorado once used a similar system under the Gallagher Amendment, which required residential properties to account for no more than 45% of total property taxes statewide. This required annual adjustments to assessment rates to maintain balance. The amendment was repealed in 2020.
Cap Assessed Value Protection Amendment
Kansas lawmakers have proposed a constitutional amendment that would limit annual property assessment increases to 3% beginning in 2027.
Key features include:
- A “look-back” cap limiting 2027 assessments to no more than 3% above 2022 values
- Applies to most real estate and residential mobile homes
- Exceptions for new construction, major improvements, and errors
- Cap generally remains even after sale
Critics’ Concerns
Opponents argue the cap does not fix the root problem — a shrinking commercial tax base.
Since local government budgets for services like police, fire, roads, and emergency response are relatively fixed, capping valuations could force mill levies to increase to maintain funding.
Critics describe it as a temporary fix that could destabilize local government funding and discourage economic development.
Additionally, undervaluing properties for too long may result in a painful correction similar to the statewide reappraisal in the late 1980s.
Could Property Taxes Be Reduced for Everyone?
Currently, the state collects 20 mills on every property tax bill to fund schools.
If school funding were shifted to another revenue source, that portion of property taxes could potentially be eliminated.
However, at the local level:
Budget equals tax.
Reducing taxes would require cutting services. Residents must decide whether they are willing to sacrifice:
- Police protection
- Fire services
- Ambulance response
- Road maintenance
- Parks and public spaces
The Long-Term Solution: Growth
Many officials agree that sustained economic growth and new construction may be the most realistic long-term solution.
New homes, commercial developments, and industrial expansion would:
- Spread the tax burden
- Increase property valuations
- Generate additional sales and hospitality tax revenue
However, some worry that certain proposed tax caps may discourage new construction by removing incentives for investment.
Kansas homeowners are now paying a significantly larger share of the state’s property tax burden, rising from 38% in 1997 to 57% in 2024.
This shift has been driven by commercial tax exemptions, slower commercial value growth, rapid residential price increases, and statutory advantages for commercial property appeals.
While proposals like the Cap Assessed Value Protection Amendment aim to offer relief, critics warn they may create funding instability or discourage economic development.
Ultimately, meaningful reform may require legislative changes, smarter tax policy adjustments, and sustained economic growth. Until then, Kansas homeowners remain at the center of the property tax conversation.