Property taxes are a major source of revenue for local governments in the United States. In 2022, the average property tax rate in the U.S. dropped to 0.83% from 0.86% in the year prior. However, property tax rates vary widely from state to state. The highest property tax rates are in New Jersey, where the average rate is 1.79%. The lowest property tax rates are in Hawaii, where the average rate is 0.30%.
In 2022, Americans paid $339.8 billion in property taxes on single-family homes in 2022, up 3.6% from the $328 billion paid out in 2021. At the same time, the average effective tax rate dropped across the country. This is likely due to the continued steep increases in home values, which outpaced tax increases despite a sagging real estate market. According to a recent analysis from ATTOM Data Solutions, the average annual tax paid in 2022 was $3,901. To read their full report, click here.
Factors contributing to property tax rates
- Property value: In general, property taxes are higher in areas where property values are high.
- Level of services provided by local governments: Property taxes are higher in areas where more services are offered.
- Political climates: In general, we tend to see lower property taxes in areas with conservative governments as compared to more liberal governments.
Property taxes can have a significant impact on the cost of owning a home. In some cases, property taxes can account for more than 10% of the monthly mortgage payment. For this reason, it is important to be aware of the property tax rates in the area where you are considering buying a home. As always, it is important to have a local and knowledgeable real estate agent to guide you throughout your home search and home buying process. Assuming that you are looking to finance your home purchase, a reputable and trusted mortgage broker will also be a tremendous asset.
Are you looking to buy a property in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.