ATTOM Data Solutions, curator of the nation’s premier property database, has released its 2017 property tax analysis for more than 86 million U.S. single family homes, which shows that property taxes levied on single family homes in 2017 totaled $293.4 billion, up 6 percent from $277.7 billion in 2016 and an average of $3,399 per home — an effective tax rate of 1.17 percent.
The average property taxes of $3,399 for a single family home in 2017 was up 3 percent from the average property tax of $3,296 in 2016, and the effective property tax rate of 1.17 percent in 2017 was up from the effective property tax rate of 1.15 percent in 2016.
The report analyzed property tax data collected from county tax assessor offices nationwide at the state, metro and county levels along with estimated market values of single family homes calculated using an automated valuation model (AVM). The effective tax rate was the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area.
New Jersey, Illinois, Vermont, Texas, New Hampshire post highest property tax rates
States with the highest effective property tax rates were New Jersey (2.28 percent), Illinois (2.22 percent), Vermont (2.19 percent), Texas (2.15 percent), and New Hampshire (2.06 percent).
Other states in the top 10 for highest effective property tax rates were Pennsylvania (2.02 percent), Connecticut (1.99 percent), New York (1.92 percent), Ohio (1.72 percent), and Wisconsin (1.67 percent).
Among 217 metropolitan statistical areas analyzed in the report with a population of at least 200,000, those with the highest effective property tax rates were Scranton, Pennsylvania (3.93 percent); Binghamton, New York (3.14 percent); Rockford, Illinois (3.03 percent); Rochester, New York (2.93 percent); and El Paso, Texas (2.63 percent).
Property taxes increase faster than national average in 58 percent of markets
Out of the 217 metropolitan statistical areas analyzed in the report, 125 (58 percent) posted an increase in average property taxes above the national average of 3 percent, including Los Angeles (7 percent increase), Dallas (11 percent increase), Houston (10 percent increase), Philadelphia (4 percent increase), and Miami (5 percent increase).
“Across California, it’s not the percentage of property tax increase that is as concerning to consumers, as it is the net effect to cash flow, especially for an aging population on fixed incomes,” said Michael Mahon, president at First Team Real Estate, covering Southern California. “This erosion of disposable income for many homeowners coupled with an aging housing inventory stock in need of repair across many areas of the state puts some homeowners in a difficult position where they have ample housing equity on paper but aren’t able to realize home value gains until a future sale of the property.”
Other major markets posting an increase in average property taxes that was above the national average were Atlanta (up 4 percent), Boston (up 5 percent), San Francisco (up 6 percent), Riverside-San Bernardino (up 5 percent), and Seattle (up 6 percent).
“The increase in property taxes in the Seattle region is not surprising given the number of voter approved measures that add to homeowners’ property taxes as well as rising home values,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle housing market. “That said, this rapid rise in values of housing more than offsets this increase — therefore the relatively small effective tax rate.
“Passage of the McCleary Bill (to fully fund K-12 basic education) means that 2018 property taxes are going to jump quite dramatically before dropping back in 2019 with the recently passed one-time property tax cut of 30 cents per $1,000 of assessed value,” Gardner added.
Hawaii, Alabama, Colorado, Tennessee, West Virginia post lowest property tax rates
States with the lowest effective property tax rates were Hawaii (0.34 percent); Alabama (0.49 percent); Colorado (0.51 percent); Tennessee (0.56 percent); and West Virginia (0.57 percent).
Other states in the top 10 for lowest effective property tax rates were Utah (0.58 percent), Delaware(0.61 percent), South Carolina (0.66 percent), Arkansas (0.68 percent), and Arizona (0.68 percent).
Among the 217 metro areas analyzed for the report, those with the lowest effective property tax rates were Honolulu (0.33 percent); Montgomery, Alabama (0.36 percent); Tuscaloosa, Alabama (0.41 percent); Colorado Springs, Colorado (0.42 percent); and Greeley, Colorado (0.45 percent).
9 counties with average annual property taxes of more than $10,000
Among 1,414 U.S. counties with at least 10,000 single family homes, those with the highest average property taxes on single family homes were all in the greater New York metro area, led by Westchester County, New York ($17,179), Rockland County, New York ($12,924), Essex County, New Jersey ($11,878), Bergen County, New Jersey ($11,585), and Nassau County, New York ($11,415).
Other counties with average property taxes of more than $10,000 — the cap on state and local tax deductions for federal income taxes under the tax reform legislation signed into law by President Donald Trump in December — on single family homes were Marin County, California ($11,295), Union County, New Jersey ($10,863), Fairfield County, Connecticut ($10,612), and Morris County, New Jersey($10,294).
Average property taxes nearly twice as high in blue counties as in red counties
Among the 1,414 U.S. counties analyzed in the report, the average property tax on single family homes in the 327 “blue” counties won by Hillary Clinton in the 2016 presidential election was $4,528, nearly twice the average property tax on single family homes of $2,462 in the 1,087 “red” counties won by Donald Trump.
There was not as much difference in the effective property tax rates between the blue counties and red counties because of higher average home values in the blue counties — $377,142 compared to $210,753 in the red counties. The effective property tax rate was 1.20 percent in the politically blue counties compared to a 1.17 percent effective property tax rate in the politically red counties.