An article in RisMedia has looked at RealtyTrac’s Property Tax Rates Report for last year, the first the company has produced. This shows the effective property tax rates for single family homes and covers over 1,000 counties throughout the country.
The report shows the average property taxes paid last year and the effective property taxes. Effective property taxes are calculated by taking the average property taxes for single family homes last year and dividing this figure by the average estimated value of single family homes at the end of the year, and by the number of years owned and property value.
RealtyTrac found that owners of low end and high end homes tend to pay the highest property tax rates. Throughout the country the average effective property tax rate for single family homes last year was 1.29%. For homes valued at $50,000 or less this rate was 1.68% while for homes valued at between $50,000 and $100,000 the rate was 1.4%. For property valued at between $1 million and $2 million the rate was 1.56%, while homes valued at between $2 million and $5 million incurred a rate of 1.77%.
Homeowners who have owned their property between five and 15 years were found to have the highest effective property tax rates while those who have owned their home for more than 20 years had the lowest effective property tax rates. Overall, the average effective property tax rate was 1.35% for homeowners who have had their property for between 10 and 15 years and this rate was 1.34% for homeowners who have owned the property between five and 10 years. Homeowners who have had their property for less than a year incurred a property tax rate of 1.18%, while the tax rate for homeowners who have had their property more than 20 years was 1.15%.
Apparently certain states give property tax advantages to homeowners who have owned the property for a long time, but those who bought their property during the middle of the housing bubble or in the years leading up to the last housing bubble may still be paying taxes on an overinflated evaluation of their home. Experts feel it may be worth the time and effort appealing their property’s assessment, if this option is available to them.
States with the highest effective property tax rates were New Jersey at 2.01%, Connecticut at 2.11%, Illinois at 2.15%, Texas at 2.18% and New York at 3.01%.
When looking at "High End" homes one should not assume they pay the highest percent of property taxes. They actually pay the same percent but it appears higher because of exemptions on primary homes. If a high end home is a second home, it would not benefit from any homestead exemption and therefore appear to pay a higher percentage.