The U.S. Cities With the Highest and Lowest Property Taxes

The cost of buying a home goes beyond the price of the house itself. Property taxes, for example, can add up, but the cost varies depending on where you live. Here are the cities where taxes are the highest.

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A study from the Lincoln Institute of Land Policy looked at property taxes in U.S. cities to find the highest and lowest tax rates. According to their methodology:

The report calculates property taxes for parcels with a range of property values in three sets of cities:

• The largest city in each state and the District of Columbia along with Aurora, Illinois and Buffalo, New York
• The largest fifty cities in the United States; and
• A rural municipality in each state.

Overall, they found that Bridgeport, CT had the highest tax rate at 3.88 percent. Honolulu had the lowest property tax rate at 0.30 percent.

There are, however, some important factors to consider that the study points out. For example, many of the cities with low property tax rates have higher local sales or income taxes, so they don’t rely as heavily on property taxes. They explain:

Cities with high local sales or income taxes do not need to raise as much revenue from the property tax, and thus have lower property tax rates on average. For example, this report shows that Bridgeport (CT) has the highest effective tax rate on a median valued home, while Birmingham (AL) has one of the lowest rates. However, in Bridgeport city residents pay no local sales or income taxes, whereas Birmingham residents pay both sales and income taxes to local governments.

Another important factor: property values. If houses are pricey enough, the city can get away with a lower tax rate and still raise a decent amount of revenue, since homes are expensive. Here are the cities with the highest and lowest rates, according to the study:

Highest Property Tax Rates

1. Bridgeport, CT: 3.88%
2. Detroit, MI: 3.81%
3. Aurora, Il:: 3.72%
4. Newark, NJ: 3.05%
5. Milwaukee, WI: 2.68%

Lowest Property Tax Rates

1. Boston, MA: 0.67%
2. Birmingham, AL: 0.66%
3. Denver, CO: 0.66%
4. Cheyenne, WY: 0.65%
5. Honolulu, HI: 0.30%

Check out the full study at the link below, which includes more detail on other cities as well as explanations for why rates vary in each city.

50-State Property Tax Comparison Study (PDF) | Lincoln Institute via Forbes

Photo by liz west