Finance

This is where property taxes increased the most last year — it’s not in California or New York

In the present day’s residence consumers might be in for a shock when the tax man comes calling.

In 2021, round $328 billion in property taxes have been imposed on single-family properties throughout the nation, in accordance with a brand new report from real-estate analytics firm Attom Knowledge Options. Development in property taxes decelerated final 12 months, regardless of the run-up in property values, suggesting that greater tax payments might be coming down the pike.

Between 2020 and 2021, the quantity levied in property taxes solely grew by 1.8% on common, representing the second-smallest improve over the previous 5 years.

“It’s hardly a shock that property taxes elevated in 2021, a 12 months when residence costs throughout the nation rose by 16%,” Rick Sharga, Attom’s govt vice chairman of market intelligence, mentioned within the report. “In truth, the actual shock is that the tax will increase weren’t increased, which means that tax assessments are lagging behind rising property values, and can doubtless proceed to go up in 2022.”

The rise in residence values, which far outpaced the rise in taxes, signifies that the efficient tax fee final 12 months truly decreased to 0.9% from 1.1% the 12 months earlier than.

However in most markets, property taxes elevated quicker than the nationwide common. The most important improve occurred in Nashville, the place the typical property tax surged 27%. Milwaukee was subsequent with an 18.6% uptick in property taxes, adopted by Baltimore and Grand Rapids, Mich.

Cities the place property taxes declined in 2021 embody Pittsburgh (down 35.1%) and New Orleans (down 20.1%). A number of cities in Texas — Houston, Dallas and Austin — additionally noticed marked decreases within the common property tax invoice.

On the state stage, Illinois had the best efficient tax fee within the nation at 1.86%, adopted by New Jersey at 1.73%. Notably, New Jersey had the best common property tax invoice for single-family properties within the nation at $9,476. Typically, metro areas within the Northeast and Midwest noticed increased tax charges than the remainder of the nation.

The potential for taxes to rise considerably sooner or later might come to symbolize a serious concern for residence consumers at a time when mortgage charges have soared to five%.

“Potential owners typically fail to incorporate property taxes when contemplating the price of homeownership,” Sharga mentioned within the report. “However, particularly in a few of the higher-priced markets throughout the nation, property taxes can add hundreds of {dollars} to annual possession prices, and presumably be the distinction between somebody having the ability to afford a house or not.”

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