The average American pays a whopping $525,000 in property taxes in their lifetime, apparently. But if recent trends are any indication, that number stands to jump considerably.
According to a new report from ATTOM Data Solutions, property taxes are up 4.4% over 2019’s numbers, resulting in a tax bill of around $3,719 for the typical homeowner.
But that’s just the national average, and in some areas, the costs are much, much higher.
Are you eyeing a new investment property? Want to be sure you won’t pay out the ears in taxes? Let’s dig into the data.
Where property taxes jumped most
Overall, it was the biggest property tax increase seen nationally in four years. At the market level, though, some hikes were even more significant. In fact, in 55% of the top 220 metro markets, property taxes increased more than the national average.
The biggest jump was seen in Salt Lake City, where the average tax bill rose 11.4% for the year — more than double the national average. Other cities with big hikes:
- San Francisco (up 11.1%)
- San Jose (up 10.8%)
- Seattle (up 10.3%)
- Atlanta (up 10.2%)
- San Diego (up 10.2%)
- Tampa (up 10%)
- Denver (up 9.9%)
- Raleigh (up 9.7%)
- Columbus (up 9.1%)
There were even a handful of counties where the average tax bill exceeded $10,000. In Rockland County, New York, for example, homeowners pay a whopping $13,931. In Marin County, California, it’s $13,257.
If you’re looking at just the effective tax rate — not increases in taxes — New Jersey, Illinois, and Texas claim the highest ones. Each has a tax rate of over 2%.
Lowest property taxes in the nation
Want an investment property with bargain-basement taxes? The data shows West Virginia is the place to be. The state’s average property tax bill is a mere $849.
Arkansas came in at second with a $1,147 average, while Tennessee’s clocked in just slightly higher at $1,202. Mississippi, at $1,241 for the average homeowner, took the No. 4 spot.
Why the jump?
The increase in property taxes isn’t too surprising. After all, tax bills are tied to home values, and those have been on a tear over the last year.
According to the most recent U.S. House Price Index from the Federal Housing Finance Agency, home prices are up a whopping 12% compared to January 2020. So unless that slows down (when the market gets some more supply), property taxes will probably keep increasing for the foreseeable future.
The bottom line
If you’re eyeing new investments this year, be sure to take local taxes into account. With home prices on the rise, these can easily get out of hand, making it hard to safeguard your bottom line and turn a profit on those properties.
To determine a property’s most recent tax bill, look to the appraisal district in the county. You can typically search any address in the area and see the property’s most recent tax bill. A local real estate agent may also be able to help.
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Published by fool.com
