These U.S. metros had the biggest property tax increase in 2021: study
(NEXSTAR) – Owners of nearly 87 million single-family homes in the United States paid more than $328 billion in effective property taxes in 2021, up 1.6% from 2020, according to a new study.
Although the total tax burden may seem large, the percentage increase was not, according to ATTOM, a real estate data company. In fact, it was the second lowest increase in the last five years – from 2019 to 2020, for example, the increase was 5.4%.
ATTOM calculated the effective tax rate in states and major US cities by taking the average annual property tax as a percentage of the “average estimated market value of homes in each geographic area.”
With property values skyrocketing during the pandemic, experts warn taxes could soon follow.
“It’s no surprise that property taxes rose in 2021, a year when home prices across the country rose 16%,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “In fact, the real surprise is that tax increases haven’t been higher, suggesting that tax assessments are lagging behind rising property values and will likely continue to rise in 2022.”
In some large metropolises, however, the tax rate has increased significantly. Of those areas with at least 1 million people, Nashville, Tennessee saw the biggest jump last year (27%), followed by Milwaukee, Wisconsin (18.6%); Baltimore, Maryland (12.3%); Grand Rapids, Michigan (12.3%); and Louisville, Kentucky (11%).
The effective rate fell in some places, with these metros leading the charts: Pittsburgh, Pennsylvania (-35.1%); New Orleans, Louisiana (-20.2%); Houston, TX (-18.7%); Dallas, TX (-12.2%); and Austin, Texas (-7.7%).
The analysis also looked at the highest effective property tax rate by state:
- Illinois (1.86%)
- New Jersey (1.73%)
- Connecticut (1.67%)
- Vermont (1.55%)
- Pennsylvania (1.37%)
- Nebraska (1.36%)
- New Hampshire (1.35%)
- New York (1.35%)
- Texas (1.31%)
- Iowa (1.31%)
The lowest effective property tax rates in 2021 were found in:
- Hawaii (.27%)
- Alabama (.37%)
- Utah (.39%)
- Arizona (.41%)
- Nevada (.41%)
- Idaho (.43%)
- Colorado (.43%)
- Tennessee (.45%)
- West Virginia (.5%)
- South Carolina (.5%)
Meanwhile, the average price of a home in the United States continues to climb, with the median cost jumping 15% to $375,300 in March from a year ago, an all-time high according to the National Association of Realtors.