A property tax "cap" sounds simple — a ceiling on what you owe. In practice, caps are implemented in three very different ways, and the specifics determine how much protection you actually get. Some cap the rate, some cap the assessed value, and some cap the tax amount. Some apply only to primary residences; some apply to everything. The three biggest cap mechanisms in the states we cover work differently enough that a homeowner in Florida and a homeowner in Indiana can both be "under the cap" and experience completely different outcomes.
Florida: Save Our Homes (assessment cap)
Florida voters approved "Save Our Homes" (SOH) in 1992 via Amendment 10 to the state constitution. The mechanism: once you establish Homestead Exemption on a property, your assessed value can't increase by more than 3% per year (or the Consumer Price Index change, whichever is lower). The 2025 cap is 2.9%.
Critical point: SOH caps growth in value, not the tax amount itself. Your millage rate can still rise, and your bill can still rise — just not because of valuation growth on the part of your home that's already being taxed.
Over time, SOH becomes enormously valuable. Consider a homestead established in 2015 with an initial market value of $300,000. If the home's actual market value has risen to $500,000 by 2025, SOH means the assessed value is probably still closer to $370,000. The gap (~$130,000) is permanently excluded from your tax base for as long as you own and homestead the property.
The gotcha: SOH resets when you sell
When a homesteaded property sells, its assessed value resets to full market value in year one of the new owner. This is why buyers of long-term-owned Florida homes often see a tax bill that's double what the seller was paying. The seller's SOH savings evaporate on transfer.
Portability partially fixes this for Florida-to-Florida moves
If you sell a Florida homestead and buy another Florida homestead within three tax years, you can "port" up to $500,000 of your accumulated SOH savings to the new property. File Form DR-501T along with your new Homestead Exemption application.
See the full mechanics on our Miami-Dade County, Broward County, and other Florida pages.
Arizona: Prop 117 + the 1% cap (double protection)
Arizona has two separate caps that work together, both put in place by voter-approved constitutional amendments.
Proposition 117 caps LPV growth at 5%
Passed in 2012 and effective since 2015, Prop 117 limits the annual growth of a property's Limited Property Value (LPV) to 5% per year. LPV is the value used to calculate primary property tax (the big majority of your bill). Even if your home's Full Cash Value (market value) rises 20% in a year — as happened in parts of Maricopa County during the 2021–22 run-up — your LPV can only rise 5%.
Over several years of a hot market, Prop 117 can create a sizable gap between FCV and LPV. A home that was LPV $300,000 in 2020 and now has FCV $450,000 still has an LPV around $365,000 — meaningfully below market. Like Florida's SOH, this protection survives for as long as you own the home (with some exceptions for new construction or major improvements, which reset LPV through a "Rule B" valuation).
The 1% primary tax cap
Arizona's constitution separately caps the primary property tax on Class 3 (owner-occupied primary residence) properties at 1% of LPV. If your calculated primary tax would exceed that amount, the state steps in with additional school aid to make up the difference — you never pay more than 1% in primary tax. Secondary taxes (bonds, voter-approved overrides, special districts) aren't capped and can push your total bill above 1%, but the primary portion is constitutionally limited.
See the full calculation on the Maricopa County (Phoenix) page.
Indiana: the 1% circuit breaker
Indiana's constitution caps homestead property tax at 1% of gross assessed value. (Non-homestead residential is capped at 2%; commercial at 3%.) This is called the "circuit breaker" because if the calculated tax on your home would exceed 1% of your gross AV, the excess is simply removed from your bill — the state doesn't make it up elsewhere, it's just forgiven.
Unlike Florida or Arizona, Indiana's cap applies to the total tax bill, not a valuation or a rate. The practical effect in high-rate Indiana districts — Hammond, Gary, East Chicago, parts of Marion County — is that a large share of homesteads pay exactly 1% of AV, regardless of what the nominal combined rate is. The calculated tax can be 2.5% or 3% of AV, and then the cap brings it down to 1%.
See how this works on the Lake County page (Hammond, Gary) where most homesteads hit the cap, and Marion County (Indianapolis) where some do.
Illinois: no cap, but the Senior Freeze
Illinois has no general property tax cap. Effective rates in the state are among the highest in the US precisely because nothing prevents the combined rate from rising — new taxing districts can be created, existing ones can raise rates, and there's no constitutional ceiling on the total bill.
The closest thing to a cap in Illinois is the Senior Citizen Assessment Freeze, which locks the Equalized Assessed Value of a primary residence at the base-year value for homeowners 65+ with household income under $65,000 (Cook; varies elsewhere). This doesn't cap the rate — if local rates rise, the senior's bill still rises — but it prevents reassessments from pushing the bill higher. Renew annually with Form PTAX-340.
Texas: the 10% appraisal cap
Texas limits the appraised value growth of a homesteaded property to 10% per year, per the Texas Constitution. (Note: 10% is higher than Florida's 3% or Arizona's 5% — Texas's cap is meaningfully weaker.) The mechanism is similar: the appraisal district calculates a market value, then applies the 10% cap to determine the "capped appraised value" used for tax purposes.
Texas homestead owners also benefit from a separate protection: the over-65 tax ceiling. If you're 65+, your school district tax is frozen at the amount owed the year you turned 65 and cannot rise — even if rates or appraisals go up.
Tennessee: no cap at all
Tennessee has no assessment cap, no tax-amount cap, and no rate cap for individual homeowners. What it does have is a mandatory statewide reappraisal cycle — every 4, 5, or 6 years per county — with a "truth in taxation" requirement that forces counties to publicly disclose and justify rate increases after reappraisals. Between reappraisal cycles, your appraised value doesn't change, so in practice your taxable base is stable over 4–6 year windows even without a formal cap.
How caps interact with reality
A common misconception is that a cap prevents tax increases, period. It doesn't. In almost every capped state, your bill can still rise because:
- Rates can rise. Only the valuation is capped. If your district raises its millage or per-$100 rate, your bill goes up.
- Secondary taxes aren't capped. Arizona's 1% cap applies to primary tax only; voter-approved bonds push totals higher.
- New construction resets everything. A major renovation, added square footage, or a new pool typically triggers a "rule B" or equivalent re-valuation.
- Sale resets the cap. The new owner starts fresh at full market value.
Still, caps are extraordinarily valuable. Over a decade of ownership, they can easily save $20,000–$50,000 on a moderately appreciating home. When you compare states, don't just look at the nominal rate — look at whether there's a cap, what it caps, and how much protection it actually provides over time.
Related: Homestead exemptions, all six states · How property tax works · Compare two counties side-by-side.