All homeowners must account for regular expenses above and beyond their mortgage payments, and one of the most reliable of these is their property tax. These taxes usually fund expenses for public services and institutions like schools; bridges, tunnels and roads (and their maintenance); telecommunications; and safety measures 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 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 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. Check with your city or county assessor’s office for more information on the frequency of property tax calculation in your area.
Property taxes by state
The table below shows average property taxes by state (in alphabetical order) for tax year 2022, according to ATTOM Data Solutions. It indicates both the annual property tax on an average-value home in the state and, for comparison, what the property tax would be on ATTOM’s national median price for the first quarter of 2023, calculated to be approximately $321,000.
| State | Average State Tax Rate | Median Home Value | Annual Tax on Median Value Home in State | Annual Tax on Median Value Home in U.S. ($321,000) |
|---|---|---|---|---|
| Source: ATTOM Data Solutions | ||||
| Alabama | 0.37% | $275,255 | $1,022 | $1,188 |
| Alaska | 0.97% | $410,998 | $3,976 | $3,114 |
| Arizona | 0.39% | $570,326 | $2,220 | $1,252 |
| Arkansas | 0.53% | $213,319 | $1,228 | $1,701 |
| California | 0.66% | $976,661 | $6,492 | $2,119 |
| Colorado | 0.40% | $736,888 | $2,983 | $1,284 |
| Connecticut | 1.57% | $487,105 | $7,671 | $5,040 |
| Delaware | 0.48% | $391,360 | $1,892 | $1,541 |
| District of Columbia | 0.57% | $1,140,758 | $6,468 | $1,830 |
| Florida | 0.67% | $608,364 | $4,085 | $2,151 |
| Georgia | 0.70% | $387,979 | $2,720 | $2,247 |
| Hawaii | 0.30% | $1,196,336 | $3,539 | $963 |
| Idaho | 0.46% | $548,407 | $2,505 | $1,177 |
| Illinois | 1.78% | $304,352 | $5,424 | $5,714 |
| Indiana | 0.74% | $264,758 | $1,960 | $2,375 |
| Iowa | 1.25% | $235,117 | $2,934 | $4,012 |
| Kansas | 1.15% | $274,233 | $3,144 | $3,691 |
| Kentucky | 0.60% | $244,640 | $1,470 | $1,926 |
| Louisiana | 0.53% | $244,227 | $1,296 | $1,701 |
| Maine | 0.89% | $414,216 | $3,699 | $2,857 |
| Maryland | 0.76% | $559,764 | $4,265 | $2,440 |
| Massachusetts | 0.94% | $746,403 | $7,044 | $3,017 |
| Michigan | 1.06% | $276,421 | $2,923 | $3,403 |
| Minnesota | 0.90% | $381,989 | $3,455 | $2,889 |
| Mississippi | 0.55% | $238,896 | $1,311 | $1,765 |
| Missouri | 0.82% | $275,018 | $2,244 | $2,632 |
| Montana | 0.65% | $446,834 | $2,885 | $2,086 |
| Nebraska | 1.36% | $286,491 | $3,902 | $4,366 |
| Nevada | 0.44% | $572,254 | $2,521 | $1,412 |
| New Hampshire | 1.28% | $534,689 | $6,855 | $4,109 |
| New Jersey | 1.79% | $531,742 | $9,527 | $5,746 |
| New Mexico | 0.60% | $348,250 | $2,016 | $1,926 |
| New York | 1.26% | $530,822 | $6,673 | $4,045 |
| North Carolina | 0.52% | $404,847 | $2,096 | $1,669 |
| North Dakota | 0.90% | $299,164 | $2,679 | $2,889 |
| Ohio | 1.27% | $255,496 | $3,235 | $4,077 |
| Oklahoma | 0.76% | $231,880 | $1,757 | $2,440 |
| Oregon | 0.78% | $568,006 | $4,433 | $2,504 |
| Pennsylvania | 1.29% | $309,508 | $3,983 | $4,141 |
| Rhode Island | 1.01% | $563,490 | $5,693 | $3,242 |
| South Carolina | 0.46% | $389,249 | $1,782 | $1,477 |
| South Dakota | 1.03% | $310,129 | $3,197 | $3,306 |
| Tennessee | 0.42% | $392,613 | $1,659 | $1,348 |
| Texas | 1.25% | $387,083 | $4,822 | $4,012 |
| Utah | 0.44% | $682,163 | $2,982 | $1,412 |
| Vermont | 1.43% | $429,277 | $6,126 | $4,590 |
| Virginia | 0.72% | $463,386 | $3,322 | $2,311 |
| Washington | 0.70% | $757,449 | $5,275 | $2,247 |
| West Virginia | 0.47% | $197,656 | $928 | $1,509 |
| Wisconsin | 1.15% | $317,889 | $3,670 | $3,691 |
| Wyoming | 0.64% | $398,337 | $2,558 | $2,054 |
How are property taxes 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 gutted and 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 typical American household currently spends about $2,459 in property taxes per year. The actual amount varies depending on where you live and the exact value of your home, which is why everyone’s property tax rate is slightly different.
Total property taxes on single-family homes rose 3.6 percent in the U.S. in 2022, according to ATTOM. This increase was more than double the 2021 increase of 1.6 percent, but well under the 5.4 percent increase from the year before. 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 home/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. Disabled veterans, surviving spouses or surviving children may also qualify for special exemptions.
- Senior citizens: In some states, senior citizens are exempt from paying property taxes. Depending on the state, this may be a designation for those aged 62, 65, or older.
- 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 homeowners who qualify as being disabled. 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. This exemption typically applies to seniors but in some states also applies to veterans, the disabled and certain other populations. It exempts a portion of your home’s value from property taxes.
- Religious and nonprofit organizations: If a religious or nonprofit organization owns the property, its locality may exempt the group from paying property tax. This will depend on your organizational structure and local statutes.
- 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 for an exemption.
- Government property: Properties owned by federal, state or local governments are typically exempt from property taxes.
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 the 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. 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, property value and exemption eligibility will help you be mindful of the impact on your budget.
I am an expert in real estate and property taxation, with a deep understanding of the intricacies involved in homeownership and the financial responsibilities associated with it. My expertise is grounded in comprehensive research, analysis of market trends, and a thorough understanding of the regulatory frameworks that govern property taxes.
Property taxes are a fundamental aspect of homeownership, constituting regular expenses beyond mortgage payments. These taxes serve as a crucial source of revenue for public services and institutions, such as schools, infrastructure maintenance, telecommunications, and safety measures. Real estate is the primary focus for property tax assessments, although some states may also tax other forms of property, such as personal assets like cars.
The amount of property tax you pay is contingent on the value of your home and is calculated based on local tax rates. Jurisdictions across all 50 states impose property taxes, primarily through local levies imposed by counties, municipalities, townships, school districts, or special districts created for specific purposes.
Property taxes can be reassessed annually, leading to fluctuations in payments. The frequency of reassessment varies by municipality, and it's advisable to check with your city or county assessor's office for specific information.
The article provides a comprehensive table showcasing average property taxes by state for the tax year 2022. This includes the average state tax rate, median home value, annual tax on a median-value home in the state, and the annual tax on the median-value home in the U.S. These figures, sourced from ATTOM Data Solutions, offer valuable insights into the variations in property tax burdens across different states.
The calculation of property taxes involves the local tax rate and the assessed value of your property, which may be less than its fair-market value. Factors like the property's condition, improvements, and land value are considered by local assessors during this process.
The article also delves into the reasons behind the variation in property taxes, highlighting that the typical American household spends around $2,459 annually on property taxes. The total property taxes on single-family homes in the U.S. rose by 3.6% in 2022, according to ATTOM.
Property tax exemptions are discussed, covering both homeowner exemptions and exemptions based on property type. Homeowners, including military personnel, veterans, senior citizens, widows, and widowers, may be eligible for exemptions. Additionally, exemptions may apply to certain property types, such as homesteads, religious and nonprofit organizations, agricultural use, and government-owned properties.
The article concludes with tips for lowering property taxes, including potential discounts for lump-sum payments and the option to request a property value reassessment. It emphasizes the dynamic nature of property taxes, influenced by local levies, property values, and exemption eligibility.
In summary, this article provides a comprehensive overview of property taxes, covering their calculation, variations by state, exemptions, and strategies for lowering tax payments.
