New data from ATTOM has determined that $339.8 billion in property taxes were levied on single-family homes during 2022, a 3.6% increase from the $328 billion harvested in 2021. However, while the increase was more than double the 1.6% growth in 2021, it was also smaller than the 5.4% increase in the prior year.
ATTOM also reported the average tax on U.S. single-family homes was up by 3% in 2022, to $3,901, after rising 1.8% in the previous year. The latest average tax resulted in an effective tax rate nationwide of 0.83 percent – a decline from 0.86% in 2021 to the lowest point since at least 2016.
“Property taxes continued their never-ending climb last year, with wide disparities continuing from one area of the country to another, connected to varying costs, services, and tax bases,” said ATTOM CEO Rob Barber. “But, on balance, the latest increase nationwide again was modest. This year, local governments and school systems will face even greater challenges keeping taxes in check, given rising inflation rates and a growing number of commercial properties that could be eligible for tax reductions after suffering a surge of vacancies during the pandemic.”
The states with the highest effective property tax rates in 2022 were New Jersey (1.79%), Illinois (1.78%), Connecticut (1.57%), Vermont (1.43%) and Nebraska (1.36%). At the other end of the spectrum, the lowest effective tax rates in 2022 were in Hawaii (0.30%), Alabama (0.37%), Arizona (0.39%), Colorado (0.40%) and Tennessee (0.42%).
“Huge gaps in average tax bills around the U.S. remain in place,” Barber added. “Those disparities are heavily connected to differences in local government and school services, public employee wages, economies of scale between large and smaller towns and the amount of commercial properties that help shoulder the local tax burden. Depending on what prospective buyers want in a community and its school system, the gaps can have a big impact on how easy or hard it is to sell a home.”
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