When it comes to property taxes across the nation’s major cities, Detroit homeowners pay the highest amounts while their counterparts in Honolulu pay the lowest.
According to the latest 50-State Property Tax Comparison Study published by the Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence, Detroit has the nation’s highest homestead effective property tax rate mostly due to its low home values – a median-valued home in Detroit faces an effective property tax rate of 3.02%.
Joining Detroit in the top five cities with the highest property tax rates are Aurora, Illinois (2.88%); Portland, Oregon (2.59%); Burlington, Vermont (2.32%); and Baltimore (2.14%).
At the other end of the spectrum, Honolulu residents benefit from low spending by their municipal government and classification that favors homeowners. Unlike other states, K–12 education funding in the Aloha State is centralized at the state level, which further works in favor of homeowners in the Hawaiian capital. As a result, Honolulu’s lowest-in-the-nation effective tax rate is a relatively scant 0.30%.
Joining Honolulu in the top five cities with the lowest property tax rates are Boston (0.49%); Charleston, South Carolina (0.49%); Salt Lake City (0.52%); and Denver (0.52%).
This annual study evaluates effective tax rates (property taxes as a percentage of market value) of 75 large US cities and 50 rural municipalities (one in each state) on homestead, commercial, industrial, and apartment properties.
“Even though this year’s report shows that the average effective tax rate on a median-valued home in each state’s largest city fell by over 5% compared to 2023, about 20 of these 53 cities experienced an increase in effective tax rates,” said Bethany Paquin, senior research analyst at the Lincoln Institute of Land Policy. “Differences in the structure of state property tax systems, reliance on the property tax versus other state and local taxes, property tax relief policies, how property is classified, and local preferences all play a role in the variation we see in property tax rates on homes across the country.”
