The accurate estimation of the amount of property taxes in any given area throughout the country is a challenging task due to the complexity and heterogeneity of property taxation in the United States. The total amount can include property taxes paid to multiple agencies with varying formulae, including both fixed and variable components. To provide a meaningful comparison of property tax rates among states, all existing levels of collection need to be considered. In New York for example, one might pay taxes to a county, a village and a school district; whereas in Florida, one might only pay county taxes.
Using its comprehensive data on property values and tax rates at the local level, CoreLogic has calculated the median overall property tax rates nationally and by state. Taking into consideration all taxing and collection entities, the analysis provides a complete state-level picture of the “cost of owning real property.” The rate differences among states do not directly translate into cost-of-living differences since the actual amounts paid are also a function of property values, but they do reflect the annual cost of owning a set amount of real property and, as such, provide an accurate comparison.
According to CoreLogic data, the average median property tax rate across the nation is 1.31 percent, which means a homeowner with a home valued at $200,000 will, on average, pay annual total property taxes of $2,620. Illinois has the highest median property tax rate at 2.67 percent, and Hawaii has the lowest median property tax rate at 0.31 percent. Figure 1 provides the median property tax rates for all states and the District of Columbia.
While higher median tax rates are seen primarily among states in the northeast, a notable exception is Texas, which has a median property tax rate of 2.17 percent. Typically, the states with the highest property tax rates, with the exception of Illinois, have multiple levels of tax collection. Conversely, the majority of states with low median tax rates have a single level of collection at the county level. Other than Hawaii, the lowest median property tax rates are primarily in the Rocky Mountain region and southeastern states.
Figure 2 shows the distribution of states by median property tax categories indicating that:
- 16 states, or 31 percent of the U.S., have a median property tax rate of less than 1 percent
- 28 states, or 55 percent of the U.S., have a median property tax rate of between 1 and 2 percent
- 7 states, or 14 percent of the U.S., have a median property tax rate of more than 2 percent
Given the many differences in taxing agencies in various communities, it’s important to analyze specifics at the local level in order to truly compare apples to apples.
Dingxi Qiu contributed to this analysis.
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