What Is Property Taxes? How To Pay It In USA?
Owning a real estate property comes with a few perks and responsibilities. If you have real estate property in the US, you are liable to pay a certain property tax to the government.
According to state laws, US citizens owning property are liable to pay property tax to the state government. The tax collected from real estate property owners helps in the development of different public projects.
Telecommunications, tunnels, bridges, schools tunnels, and public safety are some of the projects funded by the tax collected on real estate properties.
If you are thinking of buying any real estate property in any part of the US, you should consider the real estate tax in that state. This article will give you a complete overview of property tax in the US.
About Property Tax
Property tax in the US is an ad-valorem tax or regressive. As per US state laws, the real estate tax is levied upon real estate properties in the US. Real estate property owners are liable to pay the tax based on the real estate tax rate in their state. The amount of the property tax or real estate owners have to pay is assessed based on the value of their property.
Usually, homeowners in the US have to pay the tax monthly combined with their mortgages. However, if the homeowners pay off their loan, they are likely to receive a bill from the local tax department of the US government. The property tax rate varies from one state to another.
The money collected through the real estate tax goes to the development of public infrastructure, public services, and education. However, some jurisdictions also levy taxes on properties such as cars and boats.
How Are Property Taxes Calculated?
The assessed value of a taxable real estate property does not always match the actual value of the real value of the property. So a gap in the estimated value and the actual value might change the ratio of the real estate tax.
Also, another determiner of the real estate or the property tax is the location of the real estate property. In which state property is located plays a key factor in determining the amount of tax you will be paying them. It includes both the land and the structure of the property on it.
A vacant land will have a lower rate of real estate tax due to the less assessed value of the property. Assessors of the property tax use a unit called a mill which is one-thousandth part of a dollar. During the real estate tax assessment, they usually multiply three different values mentioned here ?
- The tax rates in the state.
- The taxable property value assessment.
- And the value of the real estate property.
According to the state and the market, some of these values often change or fluctuate. The states may do the property assessment on a yearly basis or keep an interval of one or two years in between.
Property Tax Rates In The US
Property tax varies from owner to owner based on the assessed value of the property and the state where the property is located. Here are the different tax rates in the US.
| Name of the States | Average State Tax Rate | Median Home Value | Annual Tax on Tax on U.S. Median Home Value | Annual Tax on State Median Home Value |
| Alabama | 0.41% | $209,000 | $1,805 | $857 |
| Alaska | 1.19% | $345,741 | $5,240 | $4,114 |
| Arizona | 0.66% | $451,099 | $2,906 | $2,977 |
| Arkansas | 0.62% | $180,282 | $2,730 | $1,118 |
| California | 0.76% | $792,787 | $3,346 | $6,025 |
| Colorado | 0.51% | $593,502 | $2,246 | $3,027 |
| Connecticut | 2.14% | $383,934 | $9,422 | $8,216 |
| Delaware | 0.57% | $358,080 | $2,510 | $2,041 |
| District of Columbia | 0.56% | $811,792 | $2,466 | $4,546 |
| Florida | 0.89% | $423,929 | $3,919 | $3,773 |
| Georgia | 0.92% | $322,949 | $4,051 | $2,971 |
| Hawaii | 0.28% | $1,055,488 | $1,233 | $2,955 |
| Idaho | 0.69% | $468,858 | $3,038 | $3,235 |
| Illinois | 2.27% | $270,237 | $9,995 | $6,134 |
| Indiana | 0.85% | $223,194 | $3,743 | $1,897 |
| Iowa | 1.57% | $194,962 | $6,913 | $3,061 |
| Kansas | 1.41% | $209,278 | $6,208 | $2,951 |
| Kentucky | 0.86% | $200,423 | $3,787 | $1,724 |
| Louisiana | 0.55% | $217,296 | $2,422 | $1,195 |
| Maine | 1.36% | $362,346 | $5,988 | $4,928 |
| Maryland | 1.09% | $416,491 | $4,799 | $4,540 |
| Massachusetts | 1.23% | $607,274 | $5,416 | $7,469 |
| Michigan | 1.54% | $234,217 | $6,781 | $3,607 |
| Minnesota | 1.12% | $337,891 | $4,931 | $3,784 |
| Mississippi | 0.81% | $168,039 | $3,566 | $1,361 |
| Missouri | 0.97% | $232,983 | $4,271 | $2,260 |
| Montana | 0.84% | $457,014 | $3,699 | $3,839 |
| Nebraska | 1.73% | $240,540 | $7,617 | $4,161 |
| Nevada | 0.60% | $477,693 | $2,642 | $2,866 |
| New Hampshire | 2.18% | $455,286 | $9,599 | $9,925 |
| New Jersey | 2.49% | $484,393 | $10,963 | $12,061 |
| New Mexico | 0.80% | $299,214 | $3,522 | $2,394 |
| New York | 1.72% | $379,307 | $7,573 | $6,524 |
| North Carolina | 0.84% | $326,383 | $3,699 | $2,742 |
| North Dakota | 0.98% | $284,545 | $4,315 | $2,789 |
| Ohio | 1.56% | $215,306 | $6,869 | $3,359 |
| Oklahoma | 0.90% | $184,901 | $3,963 | $1,664 |
| Oregon | 0.97% | $525,191 | $4,271 | $5,094 |
| Pennsylvania | 1.58% | $269,306 | $6,957 | $4,255 |
| Rhode Island | 1.63% | $446,155 | $7,177 | $7,272 |
| South Carolina | 0.57% | $299,604 | $2,510 | $1,708 |
| South Dakota | 1.31% | $296,908 | $5,768 | $3,889 |
| Tennessee | 0.71% | $304,074 | $3,126 | $2,159 |
| Texas | 1.80% | $316,247 | $7,925 | $5,692 |
| Utah | 0.63% | $595,922 | $2,774 | $3,754 |
| Vermont | 1.90% | $367,290 | $8,366 | $6,979 |
| Virginia | 0.82% | $382,825 | $3,610 | $3,139 |
| Washington | 0.98% | $628,988 | $4,315 | $6,164 |
| West Virginia | 0.58% | $140,027 | $2,554 | $812 |
| Wisconsin | 1.858% | $267,991 | $8,181 | $4,979 |
Frequently Asked Questions (FAQs):-
Here are some popular questions and answers related to US property tax.
Ans: Most US citizens with the property are liable to pay real estate or property tax in the US. They must abide by the state laws and pay property taxes to the local government to fund their community projects.
Ans: In the US, Hawaii is the state with the lowest property tax rate.
Ans: All the states in the US impose property taxes on real estate property owners. This tax is a significant contributor to the local community, helping to improve various public infrastructures, including roads, bridges, and school buildings. Unfortunately, no state in the US is free of property tax.
Final Words
Among the different types of taxes the US government levies on the citizens, the property tax is also mandatory for all property owners. This article explains property tax in brief detail. The detailed chart here should help you point out the property tax rate in your state.
I hope that this article was helpful. If you need further help, please comment below and let us know about your queries. We will reach out to you as soon as possible.
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