A newly published study from NAHB Economics, titled “Property Tax Rates After the Housing Downturn,” provides updated estimates of property taxes and tax rates for U.S. states and metropolitan areas based on data from the government’s 2009 American Community Survey (ACS). While the median annual real estate tax payment in the U.S. is $1,917 per home, the study calls attention to the significant variation in tax payments across states.
For example, homeowners in southern states — excepting Texas — and the Mountain Census Division tend to pay lower taxes per home, while homeowners in the Northeast and Pacific states — excepting Hawaii — are likely to pay property taxes exceeding the U.S. median. States with the highest property tax rates include New Jersey, New Hampshire and Texas, where rates exceed $18 per $1,000 of home value. Meanwhile, Louisiana has by far the lowest effective real estate tax rates in the nation, at just $1.79 per $1,000 of property value.
South Carolina ranked 45th in the nation with an effective real estate tax rate of $5.07 per $1,000 of property value. The Greenville area’s effective tax rate was $5.40.
Importantly, findings of the report suggest that tax assessments did not keep pace with home price changes during both the recent housing boom and bust years. In other words, homeowners in states with rapidly declining house prices faced property tax bills based on the dated higher-value tax assessments, so they effectively paid higher property tax rates during that time. Meanwhile, homeowners in states with housing appreciation paid property tax bills based on the lagging behind, lower-value assessments, thus registering declining effective tax rates.
The report also concludes that the larger the home price decline in a given market, the greater the tax rate increase has been.