Property taxes by state: What to expect in your area
As a homeowner, it’s crucial to have a clear understanding of property taxes and how they impact your finances. These taxes fund essential public services like schools, roads, and safety measures in your community. In this comprehensive guide, we’ll delve into the ins and outs of property taxes, including how they’re calculated, why they vary, and strategies for potentially reducing your tax burden.
What Are Property Taxes?
Property taxes are local assessments based on the value of your home. They vary depending on your state and municipality’s tax rates, as well as the current value of your property. While all 50 states and the District of Columbia impose property taxes, the majority of revenue comes from local levies, which can be imposed by various entities like counties, municipalities, and school districts.
Property Taxes by State:
Here is a breakdown of average property taxes by state for the year 2022, according to ATTOM Data Solutions. These figures reflect the annual property tax on an average-value home in each state, as well as the tax on ATTOM’s national median price for the first quarter of 2023.
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How Are Property Taxes Calculated?
Property taxes are determined by your local tax rate and the assessed value of your property. Your local assessor will establish your home’s assessed value, which is typically lower than its fair-market value. Factors such as the condition of your home, any significant improvements, and the value of the land it’s on may also be considered in the calculation.
Why Do Property Taxes Vary?
Property taxes vary due to differences in local tax rates and property values. According to the World Population Review, the average American household pays around $2,459 in property taxes annually. This amount fluctuates based on your location and the specific value of your home.
Who Pays Property Taxes?
Most homeowners are responsible for property taxes as part of the cost of owning a home. However, some property types and populations may be eligible for exemptions. These can include exemptions for military service members, senior citizens, widows/widowers, individuals with disabilities, and those with low incomes. Additionally, certain property types like agricultural land or government-owned properties may be exempt from property taxes.
Tips for Lowering Property Taxes:
In addition to potential exemptions, there are a couple of strategies for reducing your annual property tax. Consider paying your property tax as a lump sum each year, rather than through your mortgage’s escrow account. This may offer a discount. You can also request a property value reassessment if you believe your property’s value has declined or if you suspect an error in the calculation.
Conclusion:
Property taxes play a significant role in homeownership, funding crucial public services. Understanding how they’re calculated and knowing the available exemptions can help you effectively manage this aspect of your financial responsibilities. Stay informed about local tax rates and property values to ensure you’re prepared for any fluctuations in your annual property tax payments.