Private sales in nondisclosure states creates a key asymmetry between those in the known and those left in the dark, experts say.
to see more of our trusted coverage when you search. Private home sales in nondisclosure states across the U.S., where sale prices are withheld from public records, could potentially allow owners to get away with lowerHome sales normally generate important information that can be used to assess a property’s value and determine property tax bills.
But when homes are sold secretly off the market in nondisclosure states that prioritize sellers’ privacy, this key information is missing. What happens then, according to experts, is a murky situation that raises questions of transparency and fairness, as those who possess undisclosed sale information may find themselves in a position to use it to their advantage and lower their tax bill.
"Property taxes are typically imposed by reference to a property’s assessed value, and jurisdictions use different methods and data points to determine what that value is," Assaf Harpaz, Assistant Professor at the University of Georgia School of Law, told"However, when a property is sold off-market, a transparency issue can arise that can affect assessments, given that there are fewer publicly available data points to inform both assessors and potential homebuyers in the area," he added. Private listings are legal in all 50 states and are closely regulated by the National Association of Realtors .
The main difference in the way these listings are handled is at the state level: in most states, once a sale is finalized, deeds and transfer taxes are filed with the county recorder, making the final sale price a matter of public record. In about 12 nondisclosure states, however, final sales prices are strictly confidential and do not become public record.
It is in these states that the asymmetry—the economic term for when one side of a financial transaction knows more than the other—Harpaz described between property sold off-market and on the market is even more significant.
"Institutional, sophisticated, and wealthy actors may have a greater ability to take advantage of the lack of publicly available information, or to use the information they have, which is not public , to protest an assessment, for example," he said. "That reduced transparency can make assessments less accurate and potentially more favorable to those with superior access to market data.
" Sergio Garate, a real estate researcher at Emory University, has spent some time thinking about the issue, and has published a study on the topic with colleagues in 2025. He has come to the conclusion that the imbalance of knowledge caused by private listings in nondisclosure states has real consequences on homeowners and buyers.
In states where transaction prices are not publicly disclosed, tax assessors must rely more heavily on alternative sources of information, such as prior assessments, comparable sales, property characteristics, and sometimes the most recent listing price, Garate told"If both layers of information are missing, the actual transaction price and the public listing history, the assessor has less market evidence to work with. That makes the valuation process more difficult and increases the likelihood of errors in the assessment," he explained.
The asymmetry caused by private listings in nondisclosure states is important, Garate found in his research. Property owners can challenge an assessment if they believe it is too high, but they usually have no incentive to challenge an assessment that is too low, he said.
"Therefore, when missing information leads to more valuation errors, some owners may benefit from underassessment," Garate concluded. "In that sense, private listings could contribute to lower property tax assessments, especially in nondisclosure states where assessors already face limited access to transaction data. " This imbalance"can create inequality between disclosure and nondisclosure states or markets, mainly because the information available to buyers, sellers, assessors, lenders, and researchers differs," Garate said.
Garate and colleagues found evidence that, at a minimum, differences in disclosure laws affect appraisals and mortgage performance, with nondisclosure states presenting stronger rates of appraisal bias and a higher mortgage default probability for the most financially constrained borrowers.
"In theory, these information asymmetries should also have consequences for transaction volume, who is able to transact in the market, and how bargaining power is distributed among brokers and the other parties involved in the transaction," Garate added. New Mexico offers a great real-life example of the consequences of nondisclosure. The state embraced full nondisclosure until 2004, when it pivoted toward a partial disclosure law.
After that, New Mexico saw a roughly 4 percent increase in annual tax revenue, the equivalent of $1.09 million, according to a 2025 study. This suggests that nondisclosure laws were actually pushing property tax revenues lower than they should have been. A study published in 2004 concluded that the state collected less property taxes than it should have because high-value homes were not taxed effectively.
Tax burdens can then shift, as property taxes are often designed to raise a certain amount of revenue for local governments. If some properties are assessed below their true market value because sale information is unavailable, other properties may end up bearing a larger share of the overall tax burden.
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