In 2023, $363.3 billion in property taxes were levied on single-family homes, which is an increase of 6.9% from $339.8 billion in 2022—nearly double the 3.6% growth rate—according to ATTOM’s 2023 Property Tax Analysis Report.
Data provided in the report also indicates that the average tax on single-family homes rose to $4,062 last year, up 4.1%, after jumping 3% in 2022. Additionally, the latest average tax throughout the country resulted in an effective tax rate of 0.87%, the first increase since 2017—up from 0.83% in 2022.
“Property taxes took an unusually high turn upward last year, pushing effective rates up, while huge gaps in average tax bills between different parts of the country remained in place,” said ATTOM CEO Rob Barber. “The tax increases were likely connected, at least in part, to inflationary pressures on the cost of operating local governments and schools, along with rising public employee wages and other major expenses.
“Ongoing disparities in how much homeowners pay in different parts of the country are usually related to a couple of important things: varying levels of government services and reduced economies of scale in metro areas with many small municipalities that each maintain separate local governments and school systems,” continued Barber.
ATTOM’s report also tracked effective tax rates, which shows the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area.
A 1.7% decrease in home values nationwide, coupled with rising taxes, created a slight jump in effective rates in 2023 throughout many parts of the U.S. This year, rate trends will rely greatly on whether or not recent drop-offs in home mortgage rates and a limited supply of homes for sale push for a market rebound.
Drilling down further, Rochester, New York, stands out as a unique market in 2023. In fact, ATTOM’s data shows that the city had one of the highest effective tax rates (1.77%) among metro areas with a population of at least 1 million, even though they experienced a huge drop in average property taxes last year (-28.6%).
“If you say the tax percent has decreased, that tracks,” said Susan Glenz, team leader, REALTOR® and broker from Bespoke Homes with Keller Williams Realty, in Greater Rochester. “We have seen rapid appreciation since 2019 to the tune of 40% in average sale price in the Greater Rochester area. As assessed values catch up to full market value, naturally the tax rate decreases, as the tax budget has not increased by 40%.”
For the full report, click here.
