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
-
House GOP Bill Aims to Abolish the IRS and Rewrite the Tax CodeTax Policy The stability of the IRS faces yet another challenge as the U.S. presidency changes hands.
-
More Taxes Could Slam New Yorkers Over MTA Budget ShortfallState Taxes Lawmakers warn that New Yorkers may need to brace for more taxes.
-
More Taxes Could Slam New Yorkers Over MTA Budget Shortfall
State Taxes Lawmakers warn that New Yorkers may need to brace for more taxes.
-
IRS Free File Is Now Open for 2025: Are Your Taxes Eligible?Tax Filing Official tax season doesn't begin until late January, but taxpayers can start filing free online returns now.
-
California Fires: How to Recover Tax Records and Other Important DocumentsDisaster Recovery Having your tax records and other vital documents is important for claiming casualty loss deductions that can help with recovery.
-
Child and Dependent Care Credit: How Much Is It?CDCTC The non-refundable tax break can help working families afford quality care for their child or qualifying dependent.
-
Gov. Hochul Wants to Triple the New York Child Tax CreditState Tax Millions of New York families could get a larger state child tax credit check over the next two years under a new proposal.
-
U.S. Consumers May Feel Pinch From Panama Canal Tariff HikeTax Policy The Panama Canal tariffs on crossing ships will add to looming price hikes for U.S. consumers as Trump threatens to take control of the historic waterway.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
Does Your State Have a Child and Dependent Care Tax Credit?
Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
