Property taxes are a significant expense for homeowners across the United States. Depending on where you live, these taxes can either be a manageable cost or a financial burden. Understanding which cities have the highest and lowest property taxes can help potential buyers, investors, and current homeowners make informed decisions.
In this guide, we’ll explore the cities with the highest and lowest property tax rates in the U.S., factors influencing these rates, and tips to potentially reduce your property tax burden.
Understanding Property Taxes in the U.S.
Property taxes are levied by local governments (counties, cities, or school districts) to fund public services such as schools, infrastructure, and emergency services. The amount you pay depends on two main factors:
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Assessed Property Value – The local tax assessor determines your property’s value, which may differ from the market value.
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Property Tax Rate (Mill Rate) – Expressed as a percentage, this rate is applied to the assessed value to calculate your tax bill.
Since tax rates vary widely by location, homeowners in some cities pay significantly more than others.
Cities with the Highest Property Taxes in the U.S.
Some cities impose steep property taxes due to high local government spending, expensive public services, or high home values. Below are some of the cities with the highest property tax rates:
1. Rochester, New York
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Average Effective Tax Rate: 2.40%
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Median Home Value: $180,000
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Annual Property Tax on Median Home: $4,320
Rochester tops the list with one of the highest effective property tax rates in the country. Despite relatively affordable home prices, the high tax rate makes homeownership costly.
2. Bridgeport, Connecticut
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Average Effective Tax Rate: 2.20%
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Median Home Value: $280,000
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Annual Property Tax on Median Home: $6,160
Connecticut has some of the highest property taxes in the nation, and Bridgeport is no exception. High taxes help fund local schools and municipal services.
3. Milwaukee, Wisconsin
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Average Effective Tax Rate: 2.09%
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Median Home Value: $190,000
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Annual Property Tax on Median Home: $3,971
Wisconsin’s property taxes are among the highest in the Midwest, with Milwaukee homeowners feeling the pinch.
4. Newark, New Jersey
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Average Effective Tax Rate: 2.05%
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Median Home Value: $250,000
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Annual Property Tax on Median Home: $5,125
New Jersey is notorious for high property taxes, and Newark is one of the most expensive cities in the state.
5. Chicago, Illinois
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Average Effective Tax Rate: 1.86%
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Median Home Value: $300,000
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Annual Property Tax on Median Home: $5,580
Chicago’s property taxes have been rising due to pension obligations and city budget needs.
Cities with the Lowest Property Taxes in the U.S.
On the other end of the spectrum, some cities offer much lower property tax rates, making homeownership more affordable. Here are some of the most tax-friendly cities:
1. Honolulu, Hawaii
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Average Effective Tax Rate: 0.28%
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Median Home Value: $800,000
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Annual Property Tax on Median Home: $2,240
Hawaii has the lowest effective property tax rate in the U.S. However, high home prices offset some of the savings.
2. Birmingham, Alabama
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Average Effective Tax Rate: 0.37%
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Median Home Value: $150,000
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Annual Property Tax on Median Home: $555
Alabama offers some of the most affordable property taxes in the country, making Birmingham a great option for budget-conscious buyers.
3. Denver, Colorado
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Average Effective Tax Rate: 0.49%
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Median Home Value: $550,000
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Annual Property Tax on Median Home: $2,695
Colorado has relatively low property taxes, and Denver’s booming real estate market remains attractive despite rising home prices.
4. Las Vegas, Nevada
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Average Effective Tax Rate: 0.55%
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Median Home Value: $400,000
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Annual Property Tax on Median Home: $2,200
Nevada’s lack of state income tax and low property taxes make Las Vegas a popular choice for homeowners.
5. Charleston, South Carolina
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Average Effective Tax Rate: 0.57%
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Median Home Value: $350,000
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Annual Property Tax on Median Home: $1,995
South Carolina offers a low cost of living, and Charleston’s property taxes are among the most affordable in the Southeast.
Factors Influencing Property Tax Rates
Why do some cities have much higher property taxes than others? Here are key factors:
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Local Government Budget Needs – Cities with higher public service costs (schools, police, infrastructure) tend to have higher taxes.
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State Tax Policies – Some states rely more on property taxes than income or sales taxes.
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Home Values – In areas with skyrocketing home prices, local governments may adjust rates to avoid overburdening homeowners.
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Tax Assessment Methods – Some areas reassess property values more frequently, leading to fluctuating tax bills.
How to Reduce Your Property Tax Bill
If you live in a high-tax area, here are some ways to potentially lower your property taxes:
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Challenge Your Property Assessment – If you believe your home is overvalued, file an appeal with your local tax assessor.
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Check for Exemptions – Many states offer homestead exemptions, senior citizen discounts, or veteran benefits.
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Improve Your Home Wisely – Some renovations increase your home’s assessed value, leading to higher taxes.
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Monitor Tax Rate Changes – Stay informed about local tax policies and vote in local elections that affect rates.
Final Thoughts
Property taxes vary dramatically across the U.S., with some cities imposing rates more than eight times higher than others. If you’re considering a move or investing in real estate, it’s crucial to factor in property taxes alongside home prices and local amenities.
For those in high-tax areas, exploring exemptions and assessment appeals can help reduce costs. Meanwhile, cities with low property taxes offer attractive opportunities for buyers looking to maximize affordability.
At Avenza Land, we help you navigate real estate decisions with expert insights. Whether you’re buying, selling, or investing, understanding property taxes is key to making the best financial choice.
Would you like recommendations for tax-friendly cities based on your budget? Contact us today!