Residential Share Surges Past Commercial
A widening gap between rapidly rising home values and comparatively stagnant commercial property assessments has shifted Kansas’ property tax burden heavily onto homeowners.
In 1997, residential property owners paid 38% of statewide property taxes, while commercial and other classifications covered 62%. By 2024, that balance had flipped: homeowners now account for 57% of all property taxes, while commercial and other properties contribute 43%.
Although commercial property is taxed at 25% of appraised value compared to 11.5% for residential property, lawmakers say soaring home prices have outpaced that higher commercial rate.
How Policy Changes Altered the Base
The current structure stems from reforms dating back to the late 1980s and early 1990s. After a statewide reappraisal in 1989, voters approved a constitutional amendment in 1990 setting distinct assessment rates for residential and commercial property.
Over time, exemptions further narrowed the commercial tax base. In 2006, newly acquired commercial machinery and equipment were exempted from property tax. Industrial Revenue Bonds and economic development incentives have also allowed certain commercial properties to avoid taxes for up to a decade.
When properties are exempted, the overall tax requirement remains unchanged, meaning the responsibility shifts to non-exempt property owners—primarily homeowners.
Commercial valuations also benefit from rules that can hold reduced assessments in place for two additional years after appeals, a provision not extended to residential properties.
Market Forces Amplify the Shift
Residential sale prices in Kansas nearly doubled over the past eight years, rising from a median of $159,000 in 2016 to $305,000 in 2024. Meanwhile, commercial values increased at roughly half that pace.
Low housing supply, high demand, rising construction costs and historically low interest rates fueled the residential surge. As residential market values climbed faster, so did the proportion of property taxes paid by homeowners.
Two factors have somewhat limited the disparity: residential appraisals in all 105 counties remain below median sale prices, and a statewide residential exemption currently removes up to $172.50 from each home’s tax bill.
Debate Over Proposed Caps
Lawmakers have proposed the Cap Assessed Value Protection Amendment, which would limit annual assessment increases to 3% beginning in 2027 and cap 2027 valuations at no more than 3% above 2022 levels.
Supporters argue it would protect homeowners from volatility. Critics contend it could destabilize local budgets. Because local government funding depends on property tax revenue, capped valuations could force mill levy increases to maintain essential services such as police, fire protection and infrastructure.
Opponents warn that artificially limiting valuations may eventually create distortions, leading to future corrections similar to the costly statewide reappraisal of the late 1980s.
Long-Term Solutions
Potential remedies include raising residential exemptions, introducing targeted rebates, lowering assessment rates, or restructuring school funding to reduce the statewide 20-mill levy collected for education.
Many officials emphasize that sustained economic growth and new construction—both residential and commercial—offer the most durable solution. Expanding the tax base through development spreads costs more broadly while generating additional revenue streams.
Absent growth or structural reform, Kansas homeowners are likely to remain responsible for an increasing share of the state’s property tax obligations.
