Buying a home will likely be the most important purchase you make in your life, so it’s imperative to consider every financial factor prior to buying. For starters, you have to find a house you can afford in an area you enjoy. Then, you need to consider your closing costs, down payment plan, and monthly mortgage payments from thereon out. With these payments completed or saved for, many homeowners are shocked to learn that yes, you do have to pay annual property taxes—and they completely differ based on where you’re located!
According to CoreLogic, comparing the cost of owning property throughout the country is a complex task. The total calculated amount for a location “can include property taxes paid to multiple agencies with varying formulae, including both fixed and variable components.” As such, the data accounts for property values and tax rates at the local level to create a general statewide average. The information is then broken down into the three following categories:
- States with a median property tax of less than 1 percent: According to the study, 16 states, or 31 percent of the United States, have a median property tax of less than 1 percent. Examples include Louisiana, Tennessee, and Indiana. The lowest average property tax can be found in Hawaii, where homeowners pay an average of .31 percent.
- States with a median property tax of between 1 and 2 percent: 28 states, or 55 percent of the U.S., have a median property tax of between 1 and 2 percent. Examples include Mississippi, Florida, and Georgia.
- States with a median property tax of more than 2 percent: The study shows that 7 states, or 14 percent of the nation, have a median property tax of more than 2 percent. Typically, these higher paying states have multiple levels of tax collection at the county level. Examples include Texas, New York, and Connecticut. The highest recorded property tax is found in Illinois, where homeowners pay an average rate of 2.67 percent.
Together, these state medians create a national property tax average of 1.31 percent. This means that a homeowner with a home valued at $300,000 will be taxed about $3,930 each year. It’s important to remember that these numbers solely reflect an average of property taxes. To learn more about what your individual property tax will look like, or for more information on home financing, contact one of our mortgage specialists today.