According to a recent analysis by Lendingtree, property taxes rose in all 50 largest metropolitan areas from 2021 to 2023. During this period, the national median property tax rose 10.4%, while Tampa, Florida experienced the most important jump at 23.3%.
Currently, homeowners across the country pay a median annual property tax of $2,969, equivalent to about $247 a month. People with mortgages tend to pay more with a median annual tax of $3,343 compared to $2,474 for homeowners without mortgages. This disparity is partly due to escrow arrangements that are generally related to mortgage payments.
The study highlights that property tax hikes were not uniform across all metros. Tampa led by the highest increase, but other cities such as Indianapolis (19.8%) and Dallas (19.0%) also saw considerable hikes. Conversely, Pittsburgh experienced a minimal increase at 4.4%, followed by Philadelphia (8.2%) and Milwaukee (8.3%).
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As for absolute taxes, New York City residents pay the highest property tax at $9,937 a year. Other high tax metros include San Jose, California ($9,554) and San Francisco ($8,156). At the other end of the Birmingham, Alabama spectrum, there is a median property tax of $1,091, followed by Memphis, Tennessee ($1,856) and Louisville, Kentucky ($1,912).
Effective tax rates, which represent the percentage of the value of a home paid in taxes, also vary widely. The effective tax rate in Buffalo, New York, is 2.11%, while homeowners in Birmingham and Phoenix enjoy the lowest tax rate at 0.48%.
These variations in property tax burdens underscore the importance of homeowners considering local tax rates when assessing the overall affordability of their homes. As property taxes continue to rise in many regions, it remains an important factor in the total cost of homeownership.
