US states with the highest and lowest real estate taxes
Property taxes often depend on where you live within your county, city or district. And if you are going to buy a house in the United States in the coming months, this tax becomes one of the important factors when choosing a place to buy.
Property taxes primarily fund public schools and local services—police, highway patrol, and so on. Part of your monthly mortgage payment goes to taxes, so if you're on a tight budget, a higher property tax bill could be burdensome, writes USA Today.
For example, in Buffalo and Syracuse in the state of New York in the monthly payment of the tax is often higher than the credit part due to high tax rates, explains Lawrence Yoon, chief economist at the National Association of Realtors.
Sometimes property taxes are levied at the state level, but most often at the county, city, or district level. This means that the house on the next street may have a higher or lower tax burden than yours.
Why property taxes vary
Joan Youngman, head of the valuation and taxation department at the Lincoln Institute for Land Policy, gives one historical example, which he calls extreme. However, it is real: two almost identical houses, in the same area that covered the city line between Concord and Bow, New Hampshire, were subject to completely different property taxes. The tax rate in Concord was about twice as high as in Bow, although the children from both locations attended the same high school.
The fact is that the largest taxpayer in Bow was a power station, not residents. In Concord, homeowners bear a large share of the tax burden. How many owners of commercial, industrial and communal real estate pay taxes in your locality may affect your rate.
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The cost of housing also matters. Areas with higher real estate prices may charge less taxes, but still receive large amounts.
Take California and Ohio. Ohio has the 12th highest property tax rate in the country at 1,56%. The average Ohio home assessed at $129 generates $900 in property taxes. But California has a much lower tax rate - 2032% - 0,81th in the US - but the average home (assessed at $34) generates $385 in taxes.
Other tax considerations
Property taxes aren't the only factor residents should consider, Youngman said. For example, Bridgeport, Connecticut has the highest property tax rate, but no local sales or income taxes. Birmingham, Alabama, by contrast, has the 11th lowest property taxes, but also has many other taxes, the expert notes.
“When you add it all up, Birmingham's tax burden is actually higher than Bridgeport's,” she said.
State property taxes
In general, the effective property tax rate for homeowners in the United States is 1,2%. With the average cost of housing in 178 600 dollars, this is an annual tax bill of 2149 dollars. In eighteen states, the effective rates are the same or higher than in the whole country, and in 32 states and the District of Columbia the rates are lower.
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Using data from the Lincoln Land Policy Institute, USA Today estimated property taxes in different states at the effective tax rate for homeowners, rather than the average tax paid, which depends on the total cost of housing. If your state is not listed below, go to Lincoln Institute websiteto find out how things are where you live.
States with the least profitable property taxes:
New Jersey
- Tax rate: 2,35%
- Average house price: $ 315 900
- Average tax: $ 7410
Illinois
- Tax rate: 2,3%
- Average house price: $ 173 800
- Average tax: $ 3995
New Hampshire
- Tax rate: 2,15%
- Average house price: $ 237 300
- Average tax: $ 5100
Connecticut
- Tax rate: 1,97%
- Average house price: $ 270 500
- Average tax: $ 5327
Wisconsin
- Tax rate: 1,96%
- Average house price: $ 165 800
- Average tax: $ 3248
Texas
- Tax rate: 1,9%
- Average house price: $ 136 000
- Average tax: $ 2578
Nebraska
- Tax rate: 1,85%
- Average house price: $ 133 200
- Average tax: $ 2467
Michigan
- Tax rate: 1,78%
- Average house price: $ 122 400
- Average tax: $ 2174
Vermont
- Tax rate: 1,74%
- Average house price: $ 217 500
- Average tax: $ 3795
Rhode Island
- Tax rate: 1,63%
- Average house price: $ 238 000
- Average tax: $ 3884
States with the most favorable property taxes:
Hawaii
- Tax rate: 0,27%
- Average house price: $ 515 300
- Average tax: $ 1406
Alabama
- Tax rate: 0,43%
- Average house price: $ 125 500
- Average tax: $ 543
Louisiana
- Tax rate: 0,49%
- Average house price: $ 144 100
- Average tax: $ 707
Delaware
- Tax rate: 0,54%
- Average house price: $ 231 500
- Average tax: $ 1243
Washington, DC
- Tax rate: 0,56%
- Average house price: $ 475 800
- Average tax: $ 2665
Южная Каролина
- Tax rate: 0,57%
- Average house price: $ 139 900
- Average tax: $ 798
West Virginia
- Tax rate: 0,58%
- Average house price: $ 103 800
- Average tax: $ 607
Colorado
- Tax rate: 0,6%
- Average house price: $ 247 800
- Average tax: $ 1489
Wyoming
- Tax rate: 0,61%
- Average house price: $ 194 800
- Average tax: $ 1196
Arkansas
- Tax rate: 0,62%
- Average house price: $ 111 400
- Average tax: $ 693
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