What Is Property Taxes? How To Pay It In USA?

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property tax

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. 

Contents

About Property Tax 

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?

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 –

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 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 StatesAverage State Tax RateMedian Home ValueAnnual Tax on Tax on U.S. Median Home Value Annual Tax on State Median Home Value 
Alabama0.41%$209,000$1,805$857
Alaska1.19%$345,741$5,240$4,114
Arizona0.66%$451,099$2,906$2,977
Arkansas0.62%$180,282$2,730$1,118
California0.76%$792,787$3,346$6,025
Colorado0.51%$593,502$2,246$3,027
Connecticut2.14%$383,934$9,422$8,216
Delaware0.57%$358,080$2,510$2,041
District of Columbia0.56%$811,792$2,466$4,546
Florida0.89%$423,929$3,919$3,773
Georgia0.92%$322,949$4,051$2,971
Hawaii0.28%$1,055,488$1,233$2,955
Idaho0.69%$468,858$3,038$3,235
Illinois2.27%$270,237$9,995$6,134
Indiana0.85%$223,194$3,743$1,897
Iowa1.57%$194,962$6,913$3,061
Kansas1.41%$209,278$6,208$2,951
Kentucky0.86%$200,423$3,787$1,724
Louisiana0.55%$217,296$2,422$1,195
Maine1.36%$362,346$5,988$4,928
Maryland1.09%$416,491$4,799$4,540
Massachusetts1.23%$607,274$5,416$7,469
Michigan1.54%$234,217$6,781$3,607
Minnesota1.12%$337,891$4,931$3,784
Mississippi0.81%$168,039$3,566$1,361
Missouri0.97%$232,983$4,271$2,260
Montana0.84%$457,014$3,699$3,839
Nebraska1.73%$240,540$7,617$4,161
Nevada0.60%$477,693$2,642$2,866
New Hampshire2.18%$455,286$9,599$9,925
New Jersey2.49%$484,393$10,963$12,061
New Mexico0.80%$299,214$3,522$2,394
New York1.72%$379,307$7,573$6,524
North Carolina0.84%$326,383$3,699$2,742
North Dakota0.98%$284,545$4,315$2,789
Ohio1.56%$215,306$6,869$3,359
Oklahoma0.90%$184,901$3,963$1,664
Oregon0.97%$525,191$4,271$5,094
Pennsylvania1.58%$269,306$6,957$4,255
Rhode Island1.63%$446,155$7,177$7,272
South Carolina0.57%$299,604$2,510$1,708
South Dakota1.31%$296,908$5,768$3,889
Tennessee0.71%$304,074$3,126$2,159
Texas1.80%$316,247$7,925$5,692
Utah0.63%$595,922$2,774$3,754
Vermont1.90%$367,290$8,366$6,979
Virginia0.82%$382,825$3,610$3,139
Washington0.98%$628,988$4,315$6,164
West Virginia0.58%$140,027$2,554$812
Wisconsin1.858%$267,991$8,181$4,979

Frequently Asked Questions (FAQs):-

Here are some popular questions and answers related to US property tax. 

Q1. Who Has To Pay 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. 

Q2. Which State Has Lowest Property Tax In The USA?

Ans: In the US, Hawaii is the state with the lowest property tax rate.

Q3. Is There Anywhere In The US With No Property Tax?

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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Shahnawaz is a passionate and professional Content writer. He loves to read, write, draw and share his knowledge in different niches like Technology, Cryptocurrency, Travel,Social Media, Social Media Marketing, and Healthcare.

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