Residential Tax Rates Throughout America

I found this study on a different board and thought some here would be interested in it. It talks about the different property tax rates throughout the country.


This is interesting information and important for investors to understand just how much of their revenue is going to pay local RE taxes. A couple of thoughts on this presentation; the average is probably based upon homeowners RE tax burden and not an investors. For instance; I own Florida RE an unlike homeowners whom get a yearly homestead exemption and cap on any increase I have to pay full load. Therefore I would suggest the data in this study should be adjusted upward for investors.


The average and the median are two different things. My own state of SC has two different tax rates – 4% for owner occupied dwellings and 6% for non-owner occupied dwellings. The average tax rate for my state would be 5%, but, from the presentation you can see that the median tax rate for SC is 5.68%.

By using the “median” property tax per $1000 assessed value, you are only seeing what the 50th person of a rank ordered group of 99 paid per $1000 of assessed value. All this suggests is that out of a group of 99 residential dwelling units, there are more non-owner occupied property taxpayers above the median than there are below the median.

Since the actual taxes collected are used to find the median, the difference in the tax rates between owner occupied and non-owner occupied property appears to be already reflected in the data.

My own state of SC has two different tax rates -- 4% for owner occupied dwellings and 6% for non-owner occupied dwellings.

That figures! They’ve got to stick it to the “rich” landlords!



I appreciate your input and I do understand the difference between median and average. I simply used the term average in my comments without directly relating to the study’s format. My point is that while these studies are interesting and useful the actual process for collecting the data may fail to capture relevant details.

For instance the American Community Survey which compiles this data appears to be mailed directly to the property address and not necessarily the owner of the property. Thus for a rental property the tenant is filing the data. While the survey does ask for annual RE tax and insurance information it specifically instructs a renter to skip these questions. Therefore I would conclude that any RE tax information collected is coming from owner-occupied properties.

To further illustrate your state-by-state example one of my SF rentals in Florida valued at about $350,000 cost me $7,500 in RE taxes last year. Florida offers homestead exemption and an annual cap on property tax increases to owner occupants. I as an investor do not receive the same benefit, this same home owner occupied would generate about $2,000 in RE taxes. That difference is a big bite out of my cash flow. I’m just trying to point out the potential difference between census data and the reality of RE investing.

I see your point. If the census form was the sole basis for the data used in the study, then there is so much subjective data being used that the reliability of the study itself may be doubtful.

For example, in SC the tax assessors’ value is used as the basis for property taxes. The assessed value might be only half of the FMV, unless it was recently reassessed. We don’t know whether the survey respondents consistently provided FMV or tax assessed value in the survey. If FMV was used, then the homeowner’s expectations don’t often match reality.

Now that I look at the study more closely, focusing on my state of SC, I see that the median home price was reported, and the median property tax paid was reported. The study did not report the property tax paid on the median price home, it reported two different medians.

As long as the study’s data analysis was consistent throughout, I can only gain confidence in the result of the study that ranks SC 45th in the country for real estate taxes on owner occupied homes, not quite the least expensive place to live, but certainly in the bottom third of the country.

I agree with you that you can not use this data to predict property taxes for an investment property. However, I think you can still use the study to determine whether investing in one area is likely to be more expensive than investing in another area.

For example, in this study, the median home values for SC and NB only differ by $100. The median property tax for NB is three times greater than the median property tax for SC. Therefore, would it be reasonable to conclude that the cost of investment property ownership in NB will be higher than it is for the same property in SC even if there is a different assessment approach for non-owner occupied property?