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RealtyTrac has released a its first-ever U.S. Property Tax Rates Report for 2014, which provides average property taxes and effective property tax rates for single family homes in more than 1,000 counties nationwide as well as by state and metropolitan statistical area. The report also provides a breakdown of average property taxes in 2014 and effective property tax rates—which is the average property taxes for single family homes in 2014 divided by the average estimated value of single family homes as of the end of 2014—by number of years owned and by property value range.
Owners of very high end and very low end homes pay the highest property tax rates
Nationwide, the average effective property tax rate for all single family homes in 2014 was 1.29 percent, but the average effective property tax rate was 1.68 percent for homes valued $50,000 or below and 1.40 percent on homes valued between $50,000 and $100,000. Meanwhile the average effective property tax rate was 1.56 percent on homes valued $1 million to $2 million and 1.77 percent for homes valued $2 million to $5 million.
Homeowners who have owned between five and 15 years have highest property tax rates
The report found that homeowners who have owned five to 15 years had the highest effective property tax rates while those who have owned more than 20 years had the lowest effective property tax rates. The average effective property tax rate was 1.35 percent for homeowners who have owned between 10 and 15 years, and it was 1.34 percent for homeowners who have owned between 5 and 10 years. Meanwhile, the average effective property tax rate was 1.18 percent for homeowners who have owned less than 1 year, and it was 1.15 percent for homeowners who have owned more than 20 years.
“State laws like Prop 13 in California give a property tax advantage to homeowners who have owned for a longer time, but the bell curve in effective property tax rates in the middle of the years-owned spectrum indicates that many who purchased during the housing bubble—or in the years leading up to the housing bubble—may be paying taxes based on a still-inflated valuation of their properties,” said Daren Blomquist, vice president at RealtyTrac. “These homeowners should consider appealing their property’s assessment if that is an option available to them in their county.”
States with highest property taxes and rates
States with the highest effective property tax rates were New York (3.01 percent), Texas (2.18 percent), Illinois (2.15 percent), Connecticut (2.11 percent) and New Jersey (2.01 percent). States with the highest average property taxes in dollars for single family homes were New York ($15,625), New Jersey ($8,108), New Hampshire ($5,795), Connecticut ($5,646), and Hawaii ($5,024).
Higher-end homes account for more than half of all property tax dollars nationwide
Single family homes valued above $300,000 accounted for 25 percent of all single family homes nationwide, but the property taxes paid on those homes account for 54 percent of all property taxes paid nationwide. Single family homes values up to $300,000 accounted for 75 percent of all single family homes but 46 percent of the total property taxes paid nationwide.
States with lowest property taxes and rates
States with the lowest effective property tax rates were Alabama (0.40 percent), Wyoming (0.55 percent), Colorado (0.55 percent), West Virginia (0.60 percent) and Tennessee (0.64 percent). States with the lowest average property taxes in dollars for single family homes were Alabama ($618), West Virginia ($931), New Mexico ($1,096), Tennessee ($1,116) and Indiana ($1,418).
Counties with the highest property taxes and rates
Among the 1,042 counties with sufficient tax assessor and home value data analyzed in the report, those with the highest effective property tax rates in 2014 were Westchester County, New York, in the New York metro area (7.53 percent), Bexar County, Texas, in the San Antonio metro area (3.32 percent), De Kalb County in the Chicago metro area (3.27 percent), Passaic County, New Jersey in the greater New York metro area (2.98 percent), and Milwaukee County, Wisconsin (2.96 percent).
Counties with the highest average 2014 property taxes in dollars for single family homes were Westchester County, New York ($56,124), New York County, New York ($38,574), Nassau County, New York ($11,587), Marin County, California ($11,422), and Bergen County, New Jersey ($11,159).