U.S. property taxes rose nearly 7% in 2023

Img

Total single-family property taxes nearly doubled the rate at which they rose in 2023, increasing by 6.9% to $363.3 billion, according to data from 89.4 million homes analyzed by Attom.

That rise compared to 3.6% in 2022, and marked the biggest jump seen in the last five years. That confirms other reports and anecdotal evidence indicating that this cost has been rising at a fast clip, which could put strain on mortgage performance in some areas.

"Property taxes took an unusually high turn upward last year, pushing effective rates up, while huge gaps in average tax bills between different parts of the country remained in place," said Rob Barber, CEO at Attom, in a press release. "Tax increases were likely connected at least in part, to inflationary pressures on the cost of operating local governments and schools."

The past year's jump brought the average effective property tax rate up by 4.1% to 0.87% or $4,062 on the typical home, compared with a 3% and 0.83%, respectively, the previous year; but as Barber notes, there's a fair amount of regional variation.

Illinois led all states in effective tax rate at 1.88%, according to Attom's calculations. Attom bases the effective tax rate on the percentage of average estimated market value of home, resulting in calculations that indicate Hawaii had the lowest effective tax rate at 0.31%.

Based on dollar amount, the priciest states were in the Northeast, led by New Jersey's $9,488 average property-tax bill. That amount was nearly 10 times that of the state with the lowest average tax bill, West Virginia, where the average was just $989.

"Disparities in how much homeowners pay in different parts of the country are usually related to a couple of important things: varying levels of government services and reduced economies of scale in metro areas with many small municipalities," Barber said.

Smaller municipalities that don't have shared services and operate their governments and school systems independently generally can't operate as efficiently, he noted.

In addition, some jurisdictions may react to the strain from higher property taxes by taking steps to lower them. Texas voters approved a ballot measure last year aimed at lowering school district property taxes by $18 million.

The highest single-family property tax bills than can be found in certain counties, according to the report, noting that there are 1,502 of them in total where the number tops $10,000.

The top two counties in this category are Essex and Bergen counties in New Jersey, where the average property tax bills were $13,145 and $13,112 last year, respectively. The third is Nassau in New York at $13,059.

Rounding out the top five are San Mateo and Santa Clara counties in California at $13,001 and $12,462, respectively.

Attom is a curator of real estate data. The company analyzed state, metro and county-level property tax information from county tax assessor offices nationwide for its study. It derived estimated home values used in the report from automated valuation models.


More From Life Style