Low vs High Property Tax States

[Jewel B.]

Hello again,

I am spending my Friday evening researching real estate markets.

I have organized the states by low, moderate, or high property taxes. I hope this can be a useful quick reference to others.

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As of 2020, the US national average property tax rate is 1.1%

LOW PROPERTY TAXES (<0.81%)

WEST

Hawaii

Colorado

Nevada

Wyoming

Utah

Arizona

Idaho

California

New Mexico

MIDWEST

SOUTH

Alabama

Louisiana

South Carolina

West Virginia

Arkansas

Tennessee

Mississippi

NORTHEAST

Washington, D.C.

Delaware

MODERATE PROPERTY TAXES (0.82%-1.40%)

WEST

Montana

Oregon

Washington

Alaska

MIDWEST

Indiana

Oklahoma

Missouri

North Dakota

Minnesota

South Dakota

Kansas

SOUTH

Virginia

North Carolina

Kentucky

Florida

Georgia

NORTHEAST

Maryland

Massachusetts

Maine

HIGH PROPERTY TAXES (>1.41%)

WEST

MIDWEST

Michigan

Ohio

Iowa

Nebraska

Wisconsin

Illinois

SOUTH

Texas

NORTHEAST

Pennsylvania

Rhode Island

New York

Vermont

Connecticut

New Hampshire

New Jersey

Cross reference this with my landlord vs tenant friendly states list to get some general ideas for OOS investing locations. There are of course many factors to consider and variations within each state.

P.S. If you see any errors or have any thoughts, feel free to share :)

[Jewel B.]

Source: Rocket Mortgage

[Chris Seveney]

@Jewel G Bolden

I would say this is study is flawed as they go off of assessed value which can be more accurate or less accurate in some places.

For example if two states have a 1% and one has an assessed value of $300k and other $400k, you would say since both 1% they are the same but if the $300k assessed value is worth $350k but the $400k home is worth $600k there is a big difference.

[Jewel B.]

Quote from @Chris Seveney:

@Jewel G Bolden

I would say this is study is flawed as they go off of assessed value which can be more accurate or less accurate in some places.

For example if two states have a 1% and one has an assessed value of $300k and other $400k, you would say since both 1% they are the same but if the $300k assessed value is worth $350k but the $400k home is worth $600k there is a big difference.

 Thank you for your feedback. Do you have a better study or thought process regarding property taxes then?

[Chris Seveney]

@Jewel G Bolden

I do not because in some states it’s also down to the county level - for example PA has school taxes, Massachusetts property taxes are by town not county

I don’t look at them on a macro level but on an asset based level when running a proforma

[Jewel B.]

Quote from @Chris Seveney:

@Jewel G Bolden

I do not because in some states it’s also down to the county level - for example PA has school taxes, Massachusetts property taxes are by town not county

I don’t look at them on a macro level but on an asset based level when running a proforma

 Great, thanks for the feedback!

[Bill Brandt]

Don’t forget to eliminate all states with income tax that will make a bigger difference. And super high insurance rates. But the landlord friendly is really important. 

[Jewel B.]

Quote from @Bill Brandt:

Don’t forget to eliminate all states with income tax that will make a bigger difference. And super high insurance rates. But the landlord friendly is really important. 

 Income tax because it will affect vacancy / income / tenant quality?

Insurance rates is definitely something to look into, thanks.