Today’s house patrons could possibly be in for a shock when the tax man comes calling.
In 2021, round $328 billion in property taxes have been imposed on single-family properties throughout the nation, in keeping with a brand new report from real-estate analytics firm Attom Data Solutions. Growth in property taxes decelerated final 12 months, regardless of the run-up in property values, suggesting that larger tax payments could possibly be coming down the pike.
Between 2020 and 2021, the quantity levied in property taxes solely grew by 1.8% on common, representing the second smallest annual enhance over the previous 5 years.
“It’s hardly a surprise that property taxes increased in 2021, a year when home prices across the country rose by 16%,” Rick Sharga, Attom’s government vp of market intelligence, stated within the report. “In fact, the real surprise is that the tax increases weren’t higher, which suggests that tax assessments are lagging behind rising property values, and will likely continue to go up in 2022.”
The rise in house values, which far outpaced the rise in taxes, implies that the efficient tax price final 12 months really decreased to 0.9% from 1.1% the 12 months earlier than.
But in most markets, property taxes elevated quicker than the nationwide common. The largest enhance occurred in Nashville, the place property taxes surged 27% on common. Milwaukee was subsequent with an 18.6% uptick in property taxes, adopted by Baltimore and Grand Rapids, Mich.
Cities the place property taxes declined in 2021 embrace Pittsburgh (down 35.1%) and New Orleans (down 20.1%). Multiple cities in Texas — Houston, Dallas and Austin — additionally noticed marked decreases within the common property tax invoice.
At the state degree, Illinois had the very best efficient tax price within the nation at 1.86%, adopted by New Jersey at 1.73%. Notably, New Jersey had the very best common property tax invoice for single-family properties within the nation at $9,476. Generally, metro areas within the Northeast and Midwest noticed larger property-tax charges than the remainder of the nation.
The potential for taxes to rise considerably sooner or later might come to signify a serious concern for house patrons at a time when mortgage charges have soared to five%.
“Prospective homeowners often fail to include property taxes when considering the cost of homeownership,” Sharga stated within the report. “But, especially in some of the higher-priced markets across the country, property taxes can add thousands of dollars to annual ownership costs, and possibly be the difference between someone being able to afford a home or not.”