Property Tax Explained for Athletes: Homes & Residency

When a rookie signs his first professional contract, an NIL athlete starts earning six figures in college, or a veteran finally decides to buy the house they have been looking at for years; Most first-time homebuyers immediately calculate the down payment and monthly mortgage costs.

The expense that gets underestimated is the one that never actually disappears: property tax. Paying off a mortgage eliminates the loan, not the cost of owning taxable real estate.

Property taxes generally continue for as long as the property is owned, and on a multimillion-dollar+ home, what looks like a small percentage on paper can turn into tens of thousands of dollars in annual carrying costs.

APSM’s Ohio State $38 Million 2026 CFB Roster Valuation illustrates how some college athletes now carry seven-figure estimated market values before they ever reach a professional league.

Those valuations are not guaranteed salaries, but the broader point remains: the modern athlete can begin making serious housing and investment decisions years earlier than previous generations.

Property tax also connects directly to two other decisions APSM covers constantly: state income tax and residency. A player may move to Florida or Texas because there is no broad-based individual state income tax, only to discover that the cost of owning a home still depends heavily on local property taxes, insurance, assessments and the specific county they choose.

Where an athlete earns their money matters.
Where they own their property matters too.

What Is Property Tax?

Property tax is a recurring tax imposed primarily by local governments on real estate. Counties, cities, school districts and other local taxing authorities use the revenue to fund public schools, roads, police, fire services and other community operations.

The basic concept is straightforward: Taxable Assessed Value × Applicable Property Tax Rate = Property Tax Owed

What makes the calculation complicated is that neither part of that equation is nationally standardized.

One county may assess a home close to current market value. Another state may restrict how quickly assessments increase. A primary residence may qualify for exemptions that an investment property does not. Multiple local taxing districts can also apply to the same property.

The IRS describes real estate taxes generally as annual state or local taxes charged on the value of real property, although federal deductibility has its own separate rules.

Learn How Property Tax Applies to NIL & Professional Athletes Across Sports Leagues on its term page –> APSM Finance Glossary

Assessed Value Is Not Always the Purchase Price

A home’s market value is what buyers and sellers believe it is worth in the open market. Its assessed value is the number the government uses for property-tax purposes. Sometimes those numbers are close, while sometimes they are nowhere near each other.

That distinction becomes important when an athlete buys an expensive home from someone who has owned it for decades. The seller might currently have a relatively low tax assessment because local law restricted increases while they owned the property. Once ownership changes, however, the new buyer can trigger a reassessment.

California is one of the clearest examples. Under Proposition 13, a property’s base-year assessed value generally increases by no more than inflation or 2% annually until a qualifying change of ownership or new construction occurs. When ownership changes, the county assessor generally reassesses the property to current market value.

That means a rookie buying a veteran owner’s $6 million California home should not simply look at the seller’s previous property-tax bill and assume theirs will be identical. The purchase can reset the entire calculation.

Property Tax Rates Can Change Within the Same Metro Area

Property taxes are sometimes expressed through a millage rate, where one mill represents $1 of tax for every $1,000 of taxable assessed value. The terminology varies by jurisdiction, but the important lesson is that property tax is heavily localized.

Two athletes can own homes worth the same amount in neighboring counties and still have different tax bills because one property sits inside different school, municipal, fire, utility or special-purpose districts.

Texas demonstrates this particularly well. The state itself does not impose a state property tax. Instead, thousands of local taxing units, including school districts, counties, cities and special districts; set and collect property taxes. So saying somebody “lives in Texas” doesn’t tell you their property-tax bill. You need the actual property.

Property Tax Changes the Monthly Cost of a Home

This is where property tax stops being an abstract percentage and starts affecting an athlete’s monthly cash flow. Most buyers think of a mortgage payment as principal plus interest. In reality, lenders frequently collect property taxes and homeowners insurance through an escrow account as part of the monthly payment.

The Consumer Financial Protection Bureau describes the standard housing calculation as PITI: Principal, Interest, Taxes and Insurance. Property taxes and insurance may be deposited into escrow each month, with the mortgage servicer paying the bills when they become due.

That means a fixed-rate mortgage does not necessarily mean the homeowner’s total payment stays fixed. If property taxes or insurance rise, the escrow requirement can rise with them.

For athletes already dealing with variable compensation, signing bonuses, incentives, 1099 NIL revenue or contracts that may only be guaranteed for several seasons, that additional carrying cost deserves to be modeled before the purchase rather than discovered afterward.

Qualifying for a house and being able to comfortably carry that house through the end of an athletic career are two different financial questions.

What a Small Property Tax Percentage Means on an Expensive Home

A property-tax rate can look tiny until it gets multiplied by a seven-figure property. Consider a simplified $2 million taxable home:

Illustrative Effective Rate	Annual Property Tax	Monthly Equivalent	10 Years Before Increases
0.50%	$10,000	$833	$100,000
1.00%	$20,000	$1,667	$200,000
1.50%	$30,000	$2,500	$300,000
2.00%	$40,000	$3,333	$400,000

Those figures exclude appreciation, reassessments and future rate changes. On a $5 million home, every one percentage point of property tax represents approximately $50,000 per year before anything else involved in owning the property gets paid.

That is why high-end homes cannot be analyzed through purchase price alone. The mortgage is only one part of the carrying cost.

No State Income Tax Does Not ≠ No Property Tax

Athletes frequently hear that states such as Florida, Texas and Nevada are “tax-free.” They aren’t. They simply do not impose a broad-based individual state income tax.

States and local governments still generate revenue through other taxes, and property tax can become one of the trade-offs.

This is one of the most important connections between this article and APSM’s State Income Tax: The States That Cost Athletes the Most.

Tax Foundation’s 2026 property-tax analysis, using 2024 Census housing data, estimated the nationwide effective property-tax rate on owner-occupied housing at roughly 0.90%. Texas came in around 1.40%, Ohio around 1.36%, Florida around 0.78% and California around 0.70%.

New Jersey and Illinois were the highest in the study at approximately 1.88%. These are statewide effective averages rather than quoted tax rates for any individual house, but the variation demonstrates why “zero income tax” and “low total tax” are not the same statement.

A player considering Texas may save substantially on state income tax while owning an expensive property in a jurisdiction with a comparatively large property-tax burden.

That does not necessarily make Texas a bad financial decision. It simply means the entire tax picture has to be modeled. Athletes should be comparing net income plus housing carrying costs, not ranking states based on one tax category.

Florida, Texas and California Show Three Different Systems

The easiest way to understand property tax is to stop thinking of the United States as having one system.

It has dozens.

Florida: Homestead Protections Can Matter Over Time

Florida attracts athletes because it has no broad individual state income tax, but the property side has its own rules. For qualifying homestead property, Florida’s Save Our Homes framework limits annual increases in assessed value to the lower of 3% or the change in the Consumer Price Index. For 2026, the assessment cap is 2.7%.

That can create a major long-term benefit for someone who buys a primary residence and holds it for years. It also means the tax treatment of a long-held owner’s home may not tell a new buyer what their own future assessment will look like.

Texas: No State Income Tax, But Property Tax Is Local

Texas also has no broad individual state income tax, which makes it attractive for athletes thinking about residency and net income.

But Texas explicitly has no state property tax either. Local governments impose the property taxes instead.

Counties, school districts, cities and special districts can all participate in the final bill, which is why two Texas homes with identical purchase prices can produce materially different carrying costs.

An athlete buying in Dallas, Houston or Austin needs the actual local assessment and tax structure rather than a statewide assumption.

California: The Previous Owner’s Tax Bill Can Be Misleading

California is the opposite kind of lesson. Proposition 13 can keep a long-term owner’s taxable assessment from rising as quickly as the home’s market price. When a property changes ownership, however, it is generally reassessed to current fair market value.

This matters enormously in luxury real estate. A professional athlete touring an $8 million Los Angeles property may see a prior owner’s tax history and assume the carrying cost is manageable.

If the prior owner bought the home decades ago, that historical bill can be almost useless for estimating the new owner’s obligation.

Always model the post-purchase assessment, not simply the existing bill.

Property Ownership and Tax Residency Are Related, But They Are Not the Same

This distinction needs to be extremely clear. Buying a home in Florida, Texas, Nevada or another tax-friendly state does not automatically establish residency there.

As APSM explains in Residency Rules for Athletes: Domicile Laws & Athlete Tax Audits, residency and domicile are determined by a broader pattern of facts: where someone genuinely lives, spends time, maintains family and financial ties, holds a driver’s license, registers to vote and demonstrates an intention to make a state their permanent home.

Real estate ownership can become one piece of that evidence, but owning the property alone is not enough. That matters for athletes maintaining multiple homes. A player may own:

A property near the team’s facility.
A permanent family residence in another state.
An offseason home.
One or more investment properties.
Real estate held through business entities or partnerships.

Every property can carry its own local property-tax obligation even though only one state may ultimately serve as the athlete’s primary domicile.

Someone with a large real estate portfolio, think of the multimillion-dollar real estate holdings is not dealing with one house payment. High-value real estate creates a collection of recurring taxes, insurance bills, maintenance obligations and liquidity requirements across multiple properties.

For an athlete, the same logic applies even at a much smaller scale.

Multiple Homes Mean Multiple Tax Bills

A professional sports career creates unusual geographic pressure. Players get drafted, traded, transferred and signed by teams they did not necessarily choose based on long-term housing plans. That can lead to real estate accumulation surprisingly quickly.

Someone might own a home in their original state, buy near the team facility, then purchase another property after signing with a new organization. Property tax does not care whether the old home is still the athlete’s primary residence. If they continue owning taxable property, the obligation continues unless an exemption or other rule applies.

That is why an unused house can quietly become a balance-sheet problem. A $3 million home that costs $35,000 or $40,000 annually in property taxes, plus insurance, landscaping, utilities, security and maintenance, can burn six figures per year before the owner receives a dollar of investment return from it (ROI).

Athletes need to ask whether a second or third property is functioning as an asset, a personal lifestyle purchase, or simply expensive idle capital.

A New Purchase Can Trigger Reassessment Shock

One of the easiest mistakes for a first-time buyer to make is asking:

“What are the property taxes now?”

The better question is:

“What are the estimated property taxes after I buy it?”

The answer can be very different. Assessment systems vary across states, but sales, new construction, renovations or other taxable events may change assessed value.

This is particularly important for luxury homes because the dollar difference between an old assessment and a new market-value assessment can be enormous.

Before closing, athletes and their advisors should verify:

Current assessed value.
Expected assessed value after the transaction.
Applicable local tax rates and special assessments.
Whether the property qualifies for a homestead or primary-residence exemption.
Whether ownership through an LLC, trust or other entity changes eligibility for any exemption.
Whether renovations will trigger additional assessment.
How much the tax bill could reasonably rise over a five- or ten-year holding period.

That analysis belongs beside the mortgage payment, not underneath it in the closing paperwork.

Can Property Tax Reduce a Federal Tax Bill?

Potentially, but it should never be treated like the government is reimbursing the homeowner. State and local real property taxes can generally qualify as an itemized deduction under the federal SALT deduction rules when the requirements are met.

For tax year 2026, the overall deduction limit for qualifying state and local income, sales and property taxes is $40,400 for most filers, or $20,200 for married taxpayers filing separately.

The deduction begins to phase down for higher-income taxpayers once modified adjusted gross income exceeds specified thresholds, although it cannot fall below the statutory floor.

That is particularly relevant to professional athletes because many will exceed the income threshold where the full benefit begins declining. A tax deduction also reduces taxable income; it does not erase the property-tax bill dollar-for-dollar. If an athlete pays $40,000 in property tax, they still paid $40,000 in property tax.

How Property Tax Fits Into the Athlete Net-Reality Framework

APSM’s broader methodology starts with a simple distinction:

What you earn is not the same as what you can actually spend.

Property tax sits on the spending and wealth-retention side of that equation. An athlete can properly calculate federal taxes, state taxes, jock taxes and agent fees, arrive at their real net income, and then immediately destroy that advantage by committing too much of the remaining cash flow to an unsustainable house.

A better real-estate decision measures:

Net Take-Home Income → Housing Cost → Property Tax → Insurance → Maintenance → Remaining Investable Capital

That last number matters more than whether the house technically fits inside a lender’s approval. The goal is not to buy the biggest home a contract can temporarily support.

The goal is to build a housing structure that still makes sense if a contract ends early, an NIL deal disappears, a player gets traded, an injury changes earning power or the owner simply decides they want more capital available for other investments.

The Bottom Line

On a $2 million home, every additional 0.50 percentage point of effective property tax equals roughly $10,000 in annual carrying cost. Over ten years, that’s $100,000 before accounting for reassessment, appreciation or future rate increases.

Property tax is easy to ignore because it rarely gets the same attention as a mortgage rate or down payment, but it is one of the few housing expenses that can remain long after the loan itself is gone.

For athletes, the decision becomes even more important because property ownership intersects with short career windows, multiple residences, state-income-tax planning and residency strategy.

A no-income-tax state can still carry meaningful property taxes. A seller’s existing tax bill may not be the bill a new buyer inherits. Owning a house somewhere does not automatically establish domicile. And a multimillion-dollar property that seems affordable during a peak earning season can remain expensive decades after the contract that funded it expires.

Buying real estate should therefore be evaluated through the same lens APSM applies to a contract: ignore the headline number first, calculate the real carrying cost second, and make the decision based on what remains.

Property Tax Explained for Athletes FAQs

Do athletes still pay property tax after their mortgage is paid off?

Yes. Paying off a mortgage eliminates the debt owed to the lender, but it does not eliminate local property taxes. A homeowner generally remains responsible for applicable property taxes for as long as they continue owning taxable real estate.

Does buying a home in Florida or Texas automatically establish athlete residency?

No. Property ownership can support a residency or domicile claim, but buying a home alone does not establish legal residency for state-income-tax purposes. States generally evaluate a broader collection of facts, including where someone actually lives, spends time, maintains family ties, holds identification and intends to make their permanent home. Apostle Sports

Do states with no income tax also have no property tax?

No. Income tax and property tax are separate systems. Texas, for example, has no broad individual state income tax and no state-level property tax, but local school districts, counties, cities and special districts levy property taxes.

Can property taxes increase after someone buys a home?

Yes. A purchase may trigger reassessment depending on state law, and local tax rates can also change. California, for example, generally reassesses real property to current market value after a change in ownership before Proposition 13 limits apply to future increases.

Are property taxes included in a mortgage payment?

Often, yes. Many mortgage lenders collect money for property taxes and homeowners insurance through an escrow account as part of the owner’s monthly payment. If taxes increase, the escrow portion, and therefore the total monthly housing payment, can increase even when the principal-and-interest payment is fixed.

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Disclaimer: This article contains general financial information for educational purposes and does not constitute professional advice. APSM estimates are derived from publicly available information, tax assumptions, finance modeling, and industry-standard fee structures. Actual earnings may vary based on residency elections, private contract provisions, image/media rights agreements, bonuses, and tax filings.