- Property taxes are an important consideration when buying a house.
- Taxes tend to be highest in Northeast and Midwest cities.
- These are the 10 cities that paid the highest taxes relative to home value in 2023.
When it comes to purchasing a house, homebuyers need to consider the down payment, mortgage, insurance — and who could forget — property taxes.
Although sometimes dubbed a “hidden cost” of buying a home, property taxes can hit your wallet hard. Local governments levy property taxes to fund public services such as schools, infrastructure, fire and police protection, and other local services. And depending on where you live, they could make a serious difference in home affordability.
SmartAsset ranked 342 of the largest cities in the US to find where homeowners are paying the highest property taxes relative to home value, using data from the US Census Bureau’s 2023 American Community Survey.
Cities in the Northeast and Midwest tended to have the highest effective property tax rates, and several cities from Illinois and New York made the list. According to SmartAsset, Illinois has the second-highest property taxes in the US, with a statewide average effective tax rate of 2.1%. That’s more than twice the national average rate of 0.9%.
Many cities in upstate New York also made the top 10 list. Since property taxes are set by the local municipality, there’s high variability within the state. While New York City is infamous for its sky-high cost of living, property taxes in the city are actually in line with the national average of 0.9%. SmartAsset found that Monroe County, located in upstate New York, has one of the highest effective property tax rates in the state, at 2.9%.
One Texas city also made the list. While Texas is known for having no income tax, that doesn’t mean taxes are lower across the board, as Texas cities tend to rely heavily on property taxes as a revenue source.
Property taxes have been increasing across the board nationally. According to Redfin, monthly property tax bills have increased in 48 out of the 50 most populated metro areas since 2019.
As home prices go up, so do property taxes, said real estate data provider CoreLogic. That’s because local tax assessors periodically reevaluate property values, rendering tax bills higher if home values have gone up. For those who live in states or tax jurisdictions with annual property reassessments, property taxes have likely soared alongside appreciating home values in recent years.
Between 2019 and 2023, US median property taxes increased 23.6%, from $2,287 to $2,826. That’s a 5.9% average annual increase.
Listed below in descending order are the 10 cities with the highest property taxes, as well as the median real-estate taxes paid and the median home value for each, according to the SmartAsset analysis.
