U.S. Single-Family Homes See Property Taxes Reach $340 Billion in 2022
According to ATTOM’s comprehensive property tax analysis for 87 million single-family homes across the United States, the total property taxes levied on single-family homes reached $339.8 billion in 2022. This figure represents a notable increase of 3.6 percent from the $328 billion recorded in 2021. While this growth rate exceeded the 1.6 percent rise seen in 2021, it fell short of the 5.4 percent surge witnessed in the preceding year.
The report further reveals that the average property tax on single-family homes in the U.S. rose by 3 percent in 2022, reaching $3,901 per property. This uptick followed a 1.8 percent increase in the previous year.
Despite the rise in total taxes, the effective tax rate across the nation experienced a slight decline, dropping from 0.86 percent in 2021 to 0.83 percent in 2022, marking the lowest level observed since at least 2016.
This comprehensive analysis relied on property tax data collected from county tax assessor offices nationwide, examining data at the state, metro, and county levels. Market values of single-family homes were estimated using an automated valuation model (AVM).
The effective tax rate, calculated as the average annual property tax as a percentage of the average estimated market value of homes in each geographical area, showcased the downward trend in effective rates.
Despite the rise in total taxes, the effective tax rate across the nation experienced a slight decline, dropping from 0.86 percent in 2021 to 0.83 percent in 2022, marking the lowest level observed since at least 2016.
This comprehensive analysis relied on property tax data collected from county tax assessor offices nationwide, examining data at the state, metro, and county levels. Market values of single-family homes were estimated using an automated valuation model (AVM).
The effective tax rate, calculated as the average annual property tax as a percentage of the average estimated market value of homes in each geographical area, showcased the downward trend in effective rates.
While the upward trajectory in effective rates has been evident over the years, it is worth noting that this trend could reverse amid recent market shifts. The real estate market saw a downturn in the latter half of 2022, with declining home values attributed to factors such as doubled mortgage rates, high consumer price inflation, and other economic forces impacting home affordability.
Commenting on these findings, Rob Barber, Chief Executive Officer at ATTOM, emphasized the challenges ahead for local governments and school systems in managing tax rates amidst rising inflation and the aftermath of the pandemic.
Examining Property Tax Rates Across U.S. States: New Jersey Leads the Pack
In 2022, New Jersey retained its position at the top of the list for the highest effective property tax rates in the United States. The state recorded an effective property tax rate of 1.79 percent, solidifying its status as the state with the highest property tax burden for homeowners. Following closely behind was Illinois, with an effective property tax rate of 1.78 percent, making it the second-highest in the nation.
Connecticut trailed closely behind in third place, with a property tax rate of 1.57 percent, highlighting the significant financial commitment homeowners in the state must allocate towards property taxes. Vermont and Nebraska rounded out the top five states with the highest effective property tax rates, with rates standing at 1.43 percent and 1.36 percent, respectively.
Joining these top-ranked states were others in the top 10, each showcasing substantial property tax burdens for homeowners. Pennsylvania recorded an effective property tax rate of 1.29 percent, followed closely by New Hampshire at 1.28 percent. Ohio, New York, and Iowa also made the list, with effective property tax rates of 1.27 percent, 1.26 percent, and 1.25 percent, respectively.
The data underscores the significant financial considerations homeowners face, particularly in states with higher effective property tax rates. These rates not only impact homeowners’ budgets but also play a crucial role in shaping housing affordability and overall fiscal policies within each state.
Exploring Property Tax Rates Across the Nation: Hawaii Leads the Way with Lowest Rates
In 2022, Hawaii maintained its position at the forefront of states with the lowest effective property tax rates in the United States. With an impressively low effective property tax rate of just 0.30 percent, homeowners in Hawaii enjoy one of the most favorable tax environments in the country.
Following closely behind Hawaii in terms of low property tax burdens were Alabama and Arizona, each with an effective property tax rate of 0.37 percent and 0.39 percent, respectively. These states offer homeowners significant savings on property taxes compared to national averages.
Colorado and Tennessee rounded out the top five states with the lowest effective property tax rates, boasting rates of 0.40 percent and 0.42 percent, respectively. These states provide homeowners with relatively favorable tax climates, contributing to overall affordability.
Joining these top-ranked states were others in the top 10, each offering homeowners minimal property tax burdens. Utah and Nevada recorded effective property tax rates of 0.44 percent each, while Idaho and South Carolina followed closely behind with rates of 0.46 percent. West Virginia completed the list with a low effective property tax rate of 0.47 percent.
The data underscores the varying property tax landscapes across different states, with some offering significantly lower tax burdens compared to others. These low effective property tax rates contribute to affordability and financial advantages for homeowners in these states.
Exploring Property Tax Disparities Across U.S. Regions: Northeast Leads in High Tax Averages
In 2022, states within the Northeast region stood out for having some of the highest average property taxes in the United States. Seven out of the top 10 highest average property tax states were located in the Northeast, revealing significant disparities compared to other regions.
Topping the list was New Jersey, where homeowners faced an average single-family-home property tax of $9,527 in 2022. This figure starkly contrasted with the average property tax of $928 in West Virginia, the state with the smallest average levy, making New Jersey’s average over 10 times higher.
Following New Jersey were states like Connecticut ($7,671), Massachusetts ($7,044), New Hampshire ($6,855), and New York ($6,673), all of which recorded notably high average property tax amounts. These figures underscored the significant financial burden placed on homeowners in the Northeast due to property taxes.
In stark contrast, the Southern region of the United States boasted the 10 states with the lowest average property taxes in 2022. Apart from West Virginia ($928), these states included Alabama ($1,022), Arkansas ($1,228), Louisiana ($1,296), and Mississippi ($1,311). Homeowners in these Southern states enjoyed considerably lower average property tax burdens compared to their Northeastern counterparts.
The data highlights the substantial discrepancies in property tax averages across different regions of the United States, with homeowners in the Northeast facing significantly higher tax burdens compared to those in the South.
Consistent Disparities: Top and Bottom States in Property Taxes Remain Unchanged
The rankings for the top and bottom five states in terms of average property taxes showed remarkable consistency between 2021 and 2022. This indicates that significant disparities in average tax bills persist across the United States, maintaining their positions over the years.
Rob Barber, CEO of ATTOM, emphasized the enduring nature of these gaps in average tax bills across different states. He pointed out that these disparities are closely tied to various factors, including differences in local government and school services, public employee wages, economies of scale between larger and smaller towns, and the prevalence of commercial properties that contribute to the local tax burden.
Barber highlighted that these discrepancies can have a substantial impact on the real estate market dynamics within each community. Depending on the preferences of prospective buyers regarding community amenities and school systems, the variations in property tax burdens can significantly influence the ease or difficulty of selling a home in a particular area.
The consistent rankings between 2021 and 2022 underscore the persistent nature of these disparities and the importance of considering property tax implications when evaluating real estate opportunities across different states in the United States.
Northeastern and Midwestern Metro Areas Lead in Effective Property Tax Rates
In 2022, the highest effective property tax rates were predominantly concentrated in the Northeastern and Midwestern regions of the United States. Among the 223 metropolitan statistical areas (MSAs) with a population of at least 200,000, 19 out of the top 20 areas with the highest effective tax rates were situated in these regions. Notably, nine of the top 10 MSAs were located in states such as New York, New Jersey, Connecticut, and Illinois.
Leading the list of metro areas with the highest effective property tax rates in 2022 were Rochester, NY (2.52 percent); Trenton, NJ (2.24 percent); Rockford, IL (2.07 percent); Peoria, IL (1.96 percent); and Atlantic City, NJ (1.96 percent).
Among metro areas with a population exceeding 1 million, Hartford, CT (1.85 percent); Chicago, IL (1.75 percent); Cleveland, OH (1.57 percent); and New York, NY (1.39 percent) also ranked among the regions with the highest effective tax rates.
Conversely, metro areas with the lowest effective tax rates in 2022 were primarily located in different parts of the country. Honolulu, HI (0.28 percent); Daphne-Fairhope, AL (0.29 percent); Montgomery, AL (0.30 percent); Tuscaloosa, AL (0.32 percent); and Knoxville, TN (0.32 percent) represented the regions with the lowest effective tax rates.
Among metro areas with a population exceeding 1 million, Phoenix, AZ (0.36 percent); Nashville, TN (0.40 percent); Las Vegas, NV (0.43 percent); and Salt Lake City, UT (0.47 percent) showcased some of the lowest effective property tax rates in 2022.
These findings underscore the geographical disparities in property tax rates across different metropolitan areas, highlighting variations in tax burdens experienced by homeowners across the United States.
Property Tax Hikes Outpace National Average Across Two-Thirds of U.S. Metro Areas
In a significant trend underscoring the regional variations in property tax burdens, the latest property tax analysis revealed that average property taxes surged in 144 out of the 223 metro areas examined. This uptick represents a substantial 65 percent of the analyzed areas and outpaces the national average increase of 3 percent. Notably, the South and West regions experienced the most pronounced increases, with average tax rates climbing by 5.8 percent and 5.5 percent, respectively. In contrast, the Northeast and Midwest regions saw more modest increases, with average taxes inching up by just 0.7 percent and 2.7 percent, respectively.
Among metro areas with populations exceeding 1 million, several notable cities witnessed substantial spikes in average property taxes from 2021 to 2022. Pittsburgh, PA, led the pack with a remarkable 59.6 percent increase, followed by Rochester, NY (up 23.2 percent), Honolulu, HI (up 15.3 percent), Salt Lake City, UT (up 14.3 percent), and Miami, FL (up 12.6 percent).
Conversely, several major markets experienced noteworthy declines in average property taxes over the same period. Philadelphia, PA, saw a significant decrease of 9 percent, followed by Grand Rapids, MI (down 8.1 percent), Buffalo, NY (down 5.4 percent), Phoenix, AZ (down 2.6 percent), and Tucson, AZ (down 1.4 percent).
These findings highlight the disparities in property tax trends across different regions and metropolitan areas, underscoring the diverse financial landscapes faced by homeowners across the United States.
Average Property Taxes Exceed $10,000 in 24 U.S. Counties
In a revealing examination of property tax trends across the United States, data from 1,761 counties with a minimum of 10,000 single-family homes in 2022 unveiled that 24 counties recorded an average single-family-home property tax exceeding $10,000. Notably, 13 of these counties were situated within the New York City metro area, highlighting the region’s particularly high tax burdens. Among metropolitan areas boasting at least 100,000 housing units, the top five counties with the highest average property taxes were:
- New York County (Manhattan), NY: With an astonishing average property tax of $42,627, New York County topped the list by a significant margin.
- Marin County, CA (Outside San Francisco): Following closely behind, Marin County boasted an average property tax of $14,415.
- Essex County, NJ (Outside New York City): Positioned just outside New York City, Essex County recorded an average property tax of $13,168.
- Bergen County, NJ (Outside New York City): Similarly, Bergen County reported an average property tax of $13,115.
- Nassau County (Outside New York City), NY: Rounding out the top five, Nassau County posted an average property tax of $12,890.
These findings underscore the considerable disparities in property tax burdens across different counties, with certain regions, particularly those in close proximity to major metropolitan areas like New York City and San Francisco, facing notably higher tax rates.
