All homeowners must account for regular expenses above and beyond their mortgage payments, and one of the most reliable of these is property taxes. These taxes usually fund public services and institutions like schools, parks and infrastructure (think the building and maintenance of bridges, tunnels, sidewalks and roads) in the municipality, county or state.
Though some states may also tax other forms of property — personal assets like cars, for example — real estate is the primary source for property tax assessments.
Property taxes vary based on where you live and start with a different baseline in each state. Once you know your state’s property tax rate, you can dig deeper to learn about property tax specific to your locality.
What are property taxes?
Property taxes are levied based on the value of your home and are calculated on a local basis. How much you pay will depend on your state and municipality’s tax rates and your property’s current assessed value.
“Jurisdictions in all 50 states and the District of Columbia impose property taxes,” according to the Urban Institute & Brookings Institution’s Tax Policy Center. However, “most property tax revenue comes from local levies,” which can be imposed by counties, municipalities, townships, school districts or special districts (ie, independent government units created for a limited, specific purpose).
Property taxes can be reassessed annually, meaning they might change every year, but some municipalities adjust their rates only once every few years.
Bankrate’s take: Check with your city or county assessor’s office for more information on the frequency of property tax calculation in your area.
How are they calculated?
Property taxes are calculated based on your local tax rate and your property’s value. Your local assessor will determine your home’s assessed value, which is likely to be less than its fair-market value.
Your home, its overall condition and any significant improvements (a recently remodeled kitchen or an in-ground pool, for instance) may be considered as factors by your local assessor. They will also consider the plot your home is located on and the value of the land itself as they calculate your property tax.
Why do property taxes vary?
According to the World Population Review, the average U.S. household currently spends about $2,459 in property taxes per year. The actual amount will vary depending on where you live and the value of your home, which is why everyone’s property tax rate is slightly different.
Total property taxes on single-family homes rose 6.9 percent in the U.S. in 2023, according to a recent analysis by ATTOM Data Solutions. This is nearly double the 2022 increase of 3.6 percent and the largest increase of the past five years. Property taxes rarely go down (though levies do expire, and there are ways to potentially reduce your taxes, discussed below).
Who pays property taxes?
Most homeowners pay property taxes as part of the basic cost of buying and owning a home. However, some property types and populations may be exempt from paying at least part of their property taxes.
The National Association of Counties maintains a list of property tax exemptions by state. Some exemptions relate to the property owner, others to the property itself.
Homeowner exemptions
- Military service: Active members of the military and veterans are often eligible for tax exemptions, the details of which vary broadly by state.
- Senior citizens: In some states, senior citizens are exempt from paying property taxes. The exact age to qualify depends on the state.
- Widows and widowers: Homeowners who have lost their spouses may be eligible for a partial property tax credit or exemption, depending on their state.
- Disabilities: Many states offer exemptions for disabled homeowners — this eligibility often follows the determination of disability from a U.S. government agency.
- Income-based: Some states and localities offer property tax exemptions to people who meet poverty guidelines or other income thresholds.
Exemptions based on property type
- Homestead: If you are paying property tax on your primary residence, you may be eligible for a homestead exemption on a portion of your home’s value. This exemption typically applies to seniors but in some states also applies to veterans, the disabled and certain other populations.
- Religious and nonprofit organizations: If a religious or nonprofit group owns the property, its locality may exempt them from paying property tax.
- Agricultural use: Though this would not apply to a home, it could apply to the property taxes assessed on land you own. If you use your land for farming or agricultural purposes, check to see if you qualify.
- Government property: Properties owned by federal, state or local governments are typically exempt from property taxes.
Property tax rates by state
The table below shows average property taxes by state (in alphabetical order) for tax year 2023, according to ATTOM Data Solutions. It indicates both the annual property tax on an average-value home in each state and, for comparison, on a median-priced home nationwide.
| State | Effective Tax Rate | Average Home Value | Average Tax on Average Value Home | Average Tax on Median Value U.S. Home ($420,321*) |
|---|---|---|---|---|
| Source: ATTOM Data Solutions. *U.S. median price per Redfin data from March 2024. | ||||
| Alabama | 0.42% | $265,811 | $1,101 | $1,765 |
| Alaska | 0.95% | $416,174 | $3,947 | $3,993 |
| Arizona | 0.41% | $551,976 | $2,288 | $1,723 |
| Arkansas | 0.54% | $238,745 | $1,296 | $2,269 |
| California | 0.70% | $978,808 | $6,833 | $2,942 |
| Colorado | 0.48% | $711,438 | $3,384 | $2,017 |
| Connecticut | 1.54% | $522,453 | $8,022 | $6,472 |
| Delaware | 0.43% | $451,390 | $1,939 | $1,807 |
| District of Columbia | 0.69% | $1,050,555 | $7,237 | $2,900 |
| Florida | 0.76% | $589,518 | $4,476 | $3,194 |
| Georgia | 0.82% | $378,575 | $3,118 | $3,446 |
| Hawaii | 0.31% | $1,170,734 | $3,685 | $1,302 |
| Idaho | 0.44% | $559,739 | $2,479 | $1,849 |
| Illinois | 1.88% | $298,054 | $5,600 | $7,902 |
| Indiana | 0.86% | $261,970 | $2,241 | $3,614 |
| Iowa | 1.25% | $243,561 | $3,038 | $5,254 |
| Kansas | 1.26% | $274,933 | $3,463 | $5,296 |
| Kentucky | 0.76% | $208,894 | $1,595 | $3,194 |
| Louisiana | 0.62% | $229,885 | $1,418 | $2,605 |
| Maine | 0.82% | $467, 049 | $3,822 | $3,446 |
| Maryland | 0.81% | $541,260 | $4,374 | $3,404 |
| Massachusetts | 0.98% | $753,232 | $7,414 | $4,119 |
| Michigan | 1.04% | $284,388 | $2,961 | $4,371 |
| Minnesota | 0.98% | $382,468 | $3,737 | $4,119 |
| Mississippi | 0.62% | $220,983 | $1,367 | $2,605 |
| Missouri | 0.85% | $282,869 | $2,397 | $3,572 |
| Montana | 0.85% | $406,987 | $3,749 | $3,572 |
| Nebraska | 1.46% | $286,840 | $4,183 | $6136 |
| Nevada | 0.48% | $559,185 | $2,660 | $2,017 |
| New Hampshire | 1.25% | $572,515 | $7,172 | $5,254 |
| New Jersey | 1.64% | $577,821 | $9,488 | $6,893 |
| New Mexico | 0.62% | $350,893 | $2,190 | $2,605 |
| New York | 1.46% | $543,086 | $7,936 | $6,136 |
| North Carolina | 0.60% | $402,529 | $2,421 | $2,521 |
| North Dakota | 0.99% | $295,954 | $2,933 | $4,161 |
| Ohio | 1.37% | $258,000 | $3,539 | $5,758 |
| Oklahoma | 0.90% | $209,814 | $1,884 | $3,782 |
| Oregon | 0.83% | $554,499 | $4,613 | $3,488 |
| Pennsylvania | 1.33% | $315,163 | $4,187 | $5,590 |
| Rhode Island | 1.01% | $593,398 | $5,987 | $4,245 |
| South Carolina | 0.50% | $373,727 | $1,884 | $2,101 |
| South Dakota | 1.01% | $337,351 | $3,408 | $4,245 |
| Tennessee | 0.44% | $385,527 | $1,695 | $1,849 |
| Texas | 1.20% | $372,229 | $4,464 | $5,043 |
| Utah | 0.45% | $674,594 | $3,011 | $1,891 |
| Vermont | 1.29% | $483,169 | $6,225 | $5,422 |
| Virginia | 0.76% | $468,727 | $3,565 | $3,194 |
| Washington | 0.80% | $706,525 | $5,640 | $3,362 |
| West Virginia | 0.49% | $202,812 | $989 | $2,059 |
| Wisconsin | 1.12% | $334,682 | $3,760 | $4,707 |
| Wyoming | 0.53% | $551,530 | $2,930 | $2,227 |
Tips for lowering property taxes
In addition to the exemption possibilities listed above, you may be able to decrease your annual property tax in a couple of ways.
There may be a discount available if you pay your property tax as a lump sum each year, rather than through an escrow account on your mortgage, collected as a part of your monthly mortgage payment. Check with your local property tax assessor’s office to see if paying a direct lump sum is an option.
You may also ask to have your property value reassessed. If your property taxes are calculated every few years, and you suspect your property value has declined, you may owe less than you currently pay. Another reason to request reassessment is if you suspect an error in your property tax calculation, such as incorrect square footage or lot size.
Bottom line
Ultimately, your property taxes hinge on where you live and how much your property is worth. Do not expect your annual property tax payment to be static; local levies shift and flow over time, and sometimes property tax rates make it to the ballot for local elections. Local housing markets and property values are also always in flux, so be aware that as your property value rises, so too will your calculated tax. Staying on top of your tax rate, assessed property value and exemption eligibility will help you be mindful of the impact on your budget.
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