We love it when facts runs totally contrary to conventional wisdom.
Case in point: The National Association of Home Builders (NAHB) this week released a report on state real estate taxes across the nation, citing data from the U.S. Census Bureau’s latest American Community Survey. Living in high-tax California, we would absolutely expect to see the Golden State way up on the list of largest real estate taxes paid.
And sure enough, California had the 11th highest annual median real estate tax bill among the 50 states and Washington, D.C. in 2013 — $3,015.
Northeast states tended to have the highest tax bills, with New Jersey No. 1 in the nation at $7,331. The lowest taxes paid were in the South — Alabamans (they ranked 51st) paid $532. So California was solidly on the side of big-tax states.
But wait. Number-crunchers at the NAHB went on to note that it would also be useful to compared real estate tax rates. Most counties sets their own real estate tax rates, but dividing taxes paid statewide by the aggregate value of homes within a state reveals an effective real estate tax rate for each state.
By that calculation, the picture changes dramatically.
California, it turns out, has an effective tax rate of 0.77 percent, owing to its expensive real estate. It ranked 34th among the states.
To be sure, New Jersey is still No. 1 when it comes to real estate tax rates, at 2.09 percent, and Alabama was only one step above the bottom, at 0.39 percent. (Hawaii’s rate was 0.29 percent.) But California, in fact, sits quite comfortably among the low-tax-rate states.
Of course, this may be scant consolation for Bay Area homeowners who still pay hefty taxes for their high-value homes, but it’s worth noting a more accurate source of the pain.
The link at the top of this article will take you to the NAHB’s real estate tax report. For a look at the complete state rankings, including median home values, click here.
(Image: Flickr/Colin Harris ADE)
Home prices in the Bay Area may be flying high, but here’s a data point where, surprisingly, local owners are solidly in the middle of the pack: property taxes.
Research by the real estate website Zillow found the highest property tax rate in the nation in upstate New York: 3.76 percent in Allegany County. In second place was Milwaukee County, Wis., with a 3.68 percent take rate.
The lowest tax rate was in Caroline County, Va., at 0.17 percent, with a half-dozen more hovering near 0.2 percent.
In the Bay Area, meanwhile, Zillow said property tax rates range from 0.7 percent in San Francisco and San Mateo counties to 1.2 percent in Contra Costa County.
To be sure, Bay Area homeowners pay hefty property taxes, but that’s mostly because of the high prices those homes command.
Property taxes paid in the Bay Area averaged $5,358 in 2012, almost double the national average of $2,823. But the county with the highest average tax paid — Marin County, at $8,434 — was no match for Westchester County, N.Y., just north of New York City, where the average tax bill in 2012 was $14,829. Homeowners in at least four other East Coast counties paid average tax bills north of $11,000.
Property taxes are the second biggest cost of home ownership, after mortgage payments. And in this instance, it’s just fine that Bay Area homes and homeowners don’t place at the top of the list.
Curious about the average property taxes paid in your county compared with others in the Bay Area? The following numbers are from 2012, followed by each county’s property tax rate, according to Zillow:
Marin County: $8,434; 0.9 percent
Santa Clara County: $7,496; 0.9 percent
San Mateo County: $6,901; 0.7 percent
San Francisco County: $5,776; 0.7 percent
Alameda County: $5,024; 1.0 percent
Contra Costa County: $4,487; 1.2 percent
Napa County: $3,813; 0.9 percent
Sonoma County: $3,759; 0.9 percent
Solano County: $2,528; 1.1 percent.
(Image: Flickr/Rayana)
