Twelve months ago, most states were still competing to land the next hyperscale data center. That’s no longer true.
In 2026, Ohio and Illinois paused their data center tax breaks. Texas paused new data center grid connections pending a statewide audit. Virginia, home to the world’s largest data center market, imposed a new tax on data center electricity use. And on Sept. 16, 2026, the U.S. House passed a bipartisan bill, 417-3, that would require state utility regulators to consider making data centers pay for the grid upgrades needed to serve them.
Public opinion is moving too. A March 2026 Gallup poll found that 7 in 10 Americans oppose building an AI data center in their area, compared with 53% who oppose building a nuclear power plant in their area.
Ownwell compiled and analyzed the latest data and policy updates to show how data centers impact home values, property taxes and local legislation.
The 2 Tax Buckets: Real Property and Personal Property
In the U.S., nearly all data centers are subject to real property taxes.
- Real property includes the land and building shell. It is taxed like any commercial building: assessed value multiplied by the local millage rates set by the county, city, school district and other special districts.
- Business personal property (BPP), also called tangible personal property (TPP), is the equipment inside: servers, GPUs, switchgear, chillers, UPS batteries and generators. In states that tax business equipment, a large portion of the taxable value is in that equipment.
Where you live heavily influences the property tax benefits you’d receive from a nearby data center.
The Property Tax Trade-Off: Relief in Some Places, Burden Shifts in Others
In some cases, a single campus is worth more than thousands of homes combined. Homeowners usually benefit when the data center’s value stays on the tax rolls.
For instance, Loudoun County, Virginia, has reduced property taxes by roughly 30% over the past decade, supported by revenue from about 250 data centers. A 2026 Northern Virginia Technology Council analysis found that without that revenue, the typical Loudoun homeowner's bill would need to rise by about $5,800 a year, or 91%, to fund the same services.
In Quincy, Washington, data centers have helped reduce property taxes by about 70% over two decades.
The newest example is Effingham County, Georgia. In September 2026, commissioners approved a property tax cut expected to lower the average household's bill by roughly 40%, backed by a planned $20 billion OpenAI data center. OpenAI will still receive a 50% property tax abatement for 15 years.
"The issue comes down often to whether a data center is paying those property taxes or if it's been abated," said Jared Walczak, senior fellow, Tax Foundation, to Money.
In Illinois, the interplay among tax incentives, assessment appeals, and tax-rate mechanics illustrates how commercial valuations influence the distribution of local property taxes.
In Northlake, Illinois, where three data centers make up roughly 28% of the tax base, the average homeowner would save more than $2,000 a year, or almost 30% of their bill, without those breaks.
Because taxing bodies set overall revenue levies, a decrease in commercial assessed value shifts a larger share of the levy to remaining properties, including residential real estate.
Homeowners, particularly those near data centers receiving tax abatements, should consider appealing their property assessments to make sure they’re not overpaying or shouldering a larger share of the tax burden.
The Sales Tax Impact
State sales tax exemptions are the other half of the equation. According to an April 2026 report from the National Conference of State Legislatures, at least 38 states offer tax incentives for exempt data centers, including sales and tax exemptions. Those exemptions have grown far beyond early forecasts. For example, Ohio's exemptions cost the state $1.6 billion in 2025, 11 times the projected amount.
In a Tax Foundation model of a $1 billion facility, the shell accounts for roughly $225 million and equipment for about $775 million. Servers and chipsets alone make up 75% of the tangible personal property on a five-year replacement cycle.
There’s No Single Data Center Effect on Home Values
If you’re a homeowner wondering whether a data center down the road will hurt your home’s value, the most recent research is reassuring overall but mixed closer to the facilities. .
The National Association of REALTORS' 2026 Data Center Impact Report, released in September, found that counties with 10 or more data centers have a median home value of $431,750, compared with $174,500 in counties with none.
NAR cautions that data centers tend to locate in already strong markets, so the gap doesn’t prove that data centers caused higher values.
“There is no single data center effect. Instead, the story varies significantly depending on the local market. … We do not see evidence of weaker housing markets in counties with a large data center presence. But these are county-level numbers, and they can’t tell us what happens to an individual home next to a facility,” explains Lawrence Yun, chief economist, National Association of REALTORS.
Real estate professionals are also split.
In NAR’s survey, 25% of agents reported a positive effect on nearby home values, while 22% reported a negative one.
When asked whether data centers affected demand for residential properties, 26% said demand decreased, 27% said it stayed the same and 19% said it increased.
Ownwell; Source: “2026 Data Center Impact Report,” National Association of REALTORS®
Other research points in the same direction:
- Northern Virginia: A George Mason University analysis found that homes closer to data centers sold for more, likely because data centers cluster near major roads, utilities, and jobs.
- Indiana: Homes within 1.5 miles of data centers appreciated by 42% from 2021 to 2026, compared with 41% for their local markets. However, they trailed the market in three of the four sites studied.
- Nationally: Realtor.com found no measurable difference in sale or listing prices after large data centers opened. It projects that more than 2% of U.S. home sales will occur within five miles of a large data center by the end of 2027, more than double the 2018 share.
In short, county-level data haven’t shown a clear pattern of lower home values in areas with data centers. Living right next to one is still a local, case-by-case question.
The 2026 Policy Shift: What Has Actually Passed
After years of competing for data centers, states changed course in 2026. Here are a few items that have been enacted or put in place.
Virginia: The state's two-year budget, which took effect June 29, imposed a statewide electricity consumption tax on data centers of $0.011 per kilowatt-hour, effective July 1. The tax is expected to generate up to $600 million per year for the state's general fund or $1.2 billion over two years. The state's sales tax exemption, estimated to cost more than $1 billion a year, remains in place for now.
And on Sept. 18, Spanberger signed Executive Order 22. It bars state executive branch agencies from entering into or requiring nondisclosure agreements for data center projects. She also proposed ending by-right approvals for facilities using more than 25 megawatts of power, a change that would require local approval.
Ohio: In May, Gov. Mike DeWine paused consideration of new data center tax exemption requests while a legislative committee studies the industry.
Maine: Maine enacted a law ending eligibility for two tax incentive programs for data centers that begin operations on or after Aug. 1, 2026. The law excludes those facilities from the Business Equipment Tax Exemption and the Dirigo Business Incentives Programs.
Illinois: Gov. JB Pritzker paused processing applications for the state's data center incentives for two years, starting July 1, citing energy affordability and water use.
Texas: On Aug. 3, Gov. Greg Abbott ordered an audit of data center grid connections before any could move forward. ERCOT faces about 474 gigawatts of connection requests, roughly 90% of which are from data centers. The audit is expected to be completed by December.
Oklahoma and South Dakota: Both states enacted ratepayer protection laws in 2026. They require separate electricity rates and service terms for large power users, helping ensure residential customers don't bear the costs those users impose on the grid.
Georgia: The Peach State is a notable exception. Lawmakers there left the state's data center tax breaks in place, while ratepayer protections have come through Public Service Commission rules rather than new legislation.
Nationally: Only 13 states lack utility tariff rules specifically addressing data centers and other large power users. The House passed the Ratepayer Protection Act would require state regulators to consider rules making data centers pay the "full, incremental" cost of the power infrastructure needed to serve them.
However, the bill failed to advance in the Senate on Sept. 30, falling short of the 60 votes needed to proceed.
What Homeowners Should Watch
1. Whether data centers in your county pay full property taxes. Revenue from data centers only reduces your tax bill if the facilities remain on the tax rolls. Tax abatements and payment in lieu of taxes can reduce what they pay and shift more of the burden to small businesses and homeowners.
2. Your utility's large-load tariff. If your state is one of the 13 without large-load tariff rules, or your utility operates in PJM, some of the cost of serving data centers could show up in residential rates.
3. Local zoning decisions. With Loudoun County ending by-right approvals, Prince William County moving to do the same, Virginia's governor pushing for a statewide change, and pauses in Texas, Ohio and Illinois, more data center decisions are moving to public hearings where homeowners can weigh in.
This story was produced by Ownwell and reviewed and distributed by Stacker.
