ATTOM released its 2023 property tax analysis for 89.4 million U.S. single-family homes. The report shows that $363.3 billion in property taxes were levied in 2023, a 6.9% increase from $339.8 billion in 2022, marking the largest increase in the past five years.
The average tax on single-family homes rose 4.1% in 2023 to $4,062, following a 3% increase in 2022. This resulted in an effective nationwide tax rate of 0.87%, up from 0.83% in 2022, marking the first increase since 2017. The analysis used property tax data from county tax assessors and estimated market values of homes via an automated valuation model (AVM). The effective tax rate represents the average annual property tax as a percentage of the average estimated market value of homes.
Effective tax rates increased in many parts of the U.S. due to declining home values and rising tax bills. Home values dipped 1.7% nationwide as the housing market cooled in 2023, particularly in the latter half of the year. This decline, coupled with rising taxes, caused a slight increase in effective tax rates. Future rate trends will depend on mortgage rates and the housing supply. A market rebound could lower effective rates if home values rise faster than tax increases.
Rob Barber, CEO at ATTOM, noted that property taxes increased significantly last year, pushing effective rates up, while disparities in tax bills across the country persisted. These increases were likely influenced by inflationary pressures on local government and school expenses.
The highest effective property tax rates in 2023 were found in Illinois (1.88%), New Jersey (1.64%), Connecticut (1.54%), New York (1.46%), and Nebraska (1.46%). On the other hand, the lowest effective property tax rates were in Hawaii (0.31%), Arizona (0.41%), Alabama (0.42%), Delaware (0.43%), and Tennessee (0.44%).
Northeastern states had the highest average property taxes, led by New Jersey at $9,488. West Virginia had the lowest at $989. Among metro areas, the highest effective tax rates were in Akron, OH (2.71%), Rockford, IL (2.41%), Champaign, IL (1.95%), Trenton, NJ (1.94%), and Peoria, IL (1.91%). The metro areas with the lowest effective tax rates were Daphne-Fairhope, AL (0.27%), Salisbury, MD (0.30%), Honolulu, HI (0.31%), Knoxville, TN (0.32%), and Tuscaloosa, AL (0.32%).
Among counties, 21 had an average annual property tax above $10,000, with 12 located in the New York City metro area. Essex County, NJ had the highest average at $13,145.
Property taxes increased faster than the national average in over half of the analyzed metro areas. Major markets with the largest tax increases included Charlotte, NC (up 31.5%) and Indianapolis, IN (up 18.8%). Markets with the largest decreases included Rochester, NY (down 28.6%) and Houston, TX (down 26%).
This concise report highlights significant trends and disparities in property taxes across the U.S. for 2023.
To learn more and access detailed data, or to get the data behind these findings, contact one of ATTOM’s data experts.
