Property taxes rise primarily due to increases in a home's assessed value, local government budget hikes, or higher tax rates. Key drivers include rising market demand, home renovations (pools, decks, finished basements), general inflation, and the removal of exemptions. In Arkansas,, taxable values can increase up to 5% yearly for primary residences.
Economic factors: Inflation and housing market dynamics
If inflation is 5%, your home's value is likely to increase by about 5%, which will usually lead to a property tax increase of a similar amount. The local housing market also can play a role.
In Oklahoma, the taxable value of most real property can increase by no more than 3% for homestead/agricultural or 5% for other properties (like commercial/rental) annually, unless the property is sold or significantly improved; seniors 65+ with income limits may have their value frozen, while a sale triggers a revaluation to market value, potentially causing a large jump.
Cleveland County has the highest property tax at an average of $2,202.
Property taxes often feel high because they're based on a home's market value, which usually increases over time. Local governments calculate these taxes by applying a tax rate to the assessed value, and many homeowners believe their bills don't reflect the property's true worth.
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Do property taxes go up when you pay off your mortgage? No. Your property tax amount largely depends on the assessed value of your home, not your mortgage balance or the presence of a mortgage.
Tax changes for 2025, largely driven by the "One Big Beautiful Bill" (OBBBA) Act, introduce significant deductions for seniors, tips, overtime, and auto loan interest, expand the Child Tax Credit, and raise the SALT deduction cap to $40,000, while making several 2017 Tax Cuts and Jobs Act provisions permanent, including the seven tax brackets. Key changes include a $2,200 Child Tax Credit, a $6,000 senior deduction, deductions for qualified tips and overtime, and a permanent standard deduction increase.
Homeowners in Arkansas may receive a homestead property tax credit of up to $500 per year. Beginning with the 2026 tax bills the general assembly has authorized an increase up to $600. The credit is applicable to the “homestead”, which is defined as the dwelling of a person used as their principal place of residence.
For a $100,000 salary in Arkansas, you can expect to take home roughly $73,000 to $75,000 per year after federal, state income, FICA (Social Security & Medicare) taxes, with your exact take-home pay depending on your filing status and deductions, though you'd need to earn over $139,000 to net $100k in the state.
If your income level fluctuates from year to year, you may find yourself paying more than you expect at tax time. This is because when your income increases, you may be pushed into a higher tax bracket, resulting in higher tax rates for higher income levels.
State and Local Budgets: Economic conditions at the state and local levels can impact property tax rates. If your local government faces budget shortfalls, they may raise property taxes to make up for the deficit. Similarly, state governments can also influence property tax rates through their budget decisions.
Paying off your mortgage early offers several benefits, including saving thousands of dollars in interest and providing the financial security and freedom of owning your home outright.
You also have the option to try and settle your tax debt with an offer in compromise, which is a program that allows eligible taxpayers to settle their debt for less than the full amount owed. The IRS assesses your ability to pay based on your income, expenses, assets and overall financial situation.
Example: If your home has an assessed value of $300,000 and your local property tax rate is 2%, your property tax is $6,000. An increase in your property taxes typically means one of three things: The property tax rate in your area went up. Your property's assessed value has increased.
In Oklahoma, the taxable value of most real property can increase by no more than 3% for homestead/agricultural or 5% for other properties (like commercial/rental) annually, unless the property is sold or significantly improved; seniors 65+ with income limits may have their value frozen, while a sale triggers a revaluation to market value, potentially causing a large jump.
1. Hawaii – 0.28% Hawaii property owners enjoy the lowest property tax rates in the United States, largely due to the state's thriving tourism industry that generates significant tax revenue.