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The report breaks down county level payments and offers a state-to-state comparison that takes into account property values and differences in how the taxes are assessed.
The typical amount people pay in property taxes across the U.S. varies drastically, from less than $200 a year in some areas to more than $10,000 in others, according to a new analysis.
In a report published Tuesday, the Tax Foundation, a Washington, D.C.-based think tank, looks at the range of median property tax payments at the county level, along with effective property tax rates for each state.
Both tax rates and property values affect property owners’ tax bills, so the wide range in what people pay is not surprising. It makes sense that homeowners in parts of the country with high home values would pay more than those in less well-off areas.
Even so, the analysis sheds light on a crucial source of local government revenue. Property taxes provide funding for essentials like schools, roads and emergency services. In fiscal year 2020, the taxes accounted for about 72% of local tax collections, and about 32% of all state and local collections, the Tax Foundation’s report notes.
The median values vary significantly across the country and even within states, according to the report. For example, in Georgia’s Quitman county near the Alabama border, the median property tax is $413. But just outside Atlanta in Fulton County, the median is $3,185.
The counties (or county-equivalents) where median annual property tax payments were the lowest, and less than $200 are:
- Northwest Arctic Borough and the Kusivlak Census Area in Alaska
- Avoyelles, East Carroll and Madison parishes in Louisiana
- Choctaw County in Alabama
With bills exceeding $10,000 a year, the counties with the highest median property tax payments are:
- Bergen, Essex and Union counties in (New Jersey)
- Nassau, New York, Rockland and Westchester counties in New York
- Falls Church County in Virginia
As the report notes: “While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, it’s worth noting that property taxes are largely rooted in the ‘benefit principle’ of government finance: the people paying the property tax bills are most often the ones benefiting from the services.”
To account for property taxes tracking with home values, and differences in how governments assess the taxes, the analysis also looked at the average amount of residential property taxes actually paid as a percentage of home value in each state.
At 2.21%, New Jersey has the highest effective rate in 2020, the most recent data available. Just behind the Garden State are Illinois at 2.05% and New Hampshire at 1.96%.
Meanwhile, Hawaii has the lowest effective rate based on this measure, at 0.31%, followed by Alabama at 0.39% and Louisiana at 0.54%.
A full copy of the analysis can be found here.
Molly Bolan is the assistant editor for Route Fifty.