Many homeowners of single-family properties experienced increased tax bills last year, despite a drop in average home prices. According to real estate data firm ATTOM, the average property tax bill increased 4.1% last year. And some areas of the United States experienced higher tax hikes than others.
ATTOM CEO Rob Barber explained in a statement that the property tax hikes were partly due to “inflationary pressures... along with rising public employee wages and other major expenses.”
Revenue from property taxes funds police and fire departments, maintains roads, and other initiatives that benefit the public. And when inflation is high, like it is now, these initiatives require more money to operate.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For example, the increased cost of living requires salary increases for public workers. So, localities raise property taxes to provide those higher salaries, allowing residents continued access to public services.
Here are some metropolitan areas in the U.S. where, according to ATTOM’s annual report, property taxes have increased the most.
Charlotte property taxes
Property taxes in Charlotte, North Carolina rose 31.5% from 2022 to 2023, significantly higher than the national average of 4.1%. Even so, property tax bills across the state are among the lowest in the country, with a median tax bill of $1,724, according to US Census Bureau data.
The average effective tax rate in North Carolina is just over 0.7%, which is also lower than in most other states.
Indianapolis
Average property taxes in Indianapolis, Indiana increased 18.1%, which is significantly less than in Charlotte. However, homeowners in the Hoosier State still saw tax bills over four times the national average last year. However, Indiana residents also tend to pay less property taxes overall.
The state’s median tax bill didn’t reach $1,500, and the average effective tax rate is less than 0.8%.
Kansas City
Kansas City, Missouri homeowners paid an average of 16.8% more last year than the year before. And although Missouri's average effective property tax rate reaches closer to 1%, median tax bills across the state were less than $1,900.
Denver property tax
Property taxes were up nearly 16% in Denver, Colorado last year. And despite an average effective property tax rate of less than 0.5%, the median property tax bill exceeded $2,200. That’s largely because the median home value in the Centennial State is nearly half of a million dollars.
Atlanta property tax increase
Property taxes in Atlanta, Georgia rose almost as much as in Denver, at 15.2%. However, property taxes across the state remained well below the national average. The average effective tax rate was just over 0.8%, and the median property tax bill was less than $2,100.
Home values and high property taxes
Inflation isn’t the only factor that drives higher property tax bills. Home values also contribute to property tax amounts. For example, Californians receive some of the highest tax bills in the country, despite the state imposing one of the lowest property tax rates. This is due to the generally high home prices in California.
And even if you don’t live in a state that is raising tax rates, you could experience higher tax bills. Making renovations to your home can increase the taxable value of your property, which can also increase your tax bill. And rising home prices can increase your property taxes, whether you make improvements to your home or not.
Related Content
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
FSA Contribution Limits Are Higher for 2025FSA A flexible spending account allows you to build tax-free savings for certain medical expenses.
-
Florida Tax Deadline Extension: What You Need to KnowTax Relief The IRS extended federal tax return file time due to severe storms.
-
IRS: Here’s How to Recover Your Tax Records After a Natural DisasterTax Records Your tax documents can help you get federal relief faster, the IRS says.
-
Voters Approve New Veteran Property Tax ReliefTax Relief Thanks to the election, some Veterans will soon see expanded property tax exemptions.
-
Nevada Approves Diaper Tax Relief Amid Childcare CrisisTax Relief Nevada voters have expanded sales tax relief to diapers. But are prices still too high?
-
Earned Income Tax Credit (EITC) 2024: How Much Will You Get?Tax Credits The refundable amount for workers with or without children is slightly higher this year. Here’s what you need to know.
-
IRS Expands Tax Breaks for Breast Cancer Screenings, ContraceptivesHealthcare Now you can get a tax deduction or reimbursement for certain medical expenses, like over-the-counter birth control and condoms.
