When it comes to buying a home, many people focus on the cost of the property itself and forget about the other associated costs, such as property taxes. While rising mortgage rates and high real estate prices are often discussed in the media, property taxes are just as important to consider.
Real estate attorney Michael Romer of Romer Debbas notes that property taxes are based on the value of the property and the location of the home. This means that as real estate values increase, property taxes can increase as well. Jacob Channel, senior economic analyst at LendingTree, explain that property taxes usually change annually and can either go up or down depending on the value of the property.
The US City With the Lowest Property Taxes – People Are Moving There for This Reason
It’s significant to keep in mind that property taxes can add up to thousands of dollars per year. According to real estate data firm Attom, $328 billion in property taxes were levied on single-family homes in 2021 (and a similar amount in 2022), representing a 1.6% increase from the previous year. Rick Sharga, executive vice president of market intelligence at the firm, believes that property tax increases are likely to continue in the next years due to lagging tax assessments that have not kept up with rising property values.
Despite the overall trend of rising property taxes, there are still some cities where property taxes remain relatively inexpensive. According to the firm’s analysis of approximately 220 metro areas, Montgomery, where the median home value is only about $127,000, has the lowest average property taxes among metro areas, at just $609 per year.
What to Consider in Real Estate Property Taxes When Buying a Home There
It’s important to take property taxes into consideration when looking to buy a home. It’s also important to note that property taxes can vary significantly depending on location, so it’s worth doing research on property taxes in the area where you’re considering buying a home. This can help you avoid any surprises and plan accordingly for the cost of owning a home.
In addition, working with a real estate agent or attorney who is knowledgeable about property taxes in a given area can be helpful. They can provide guidance on what to expect and help you navigate the process of buying a home with property taxes in mind.
These are the 8 metro areas with the lowest average property taxes in recent years:
- Montgomery, AL: $609
- Tuscaloosa, AL: $823
- Houma-Thibodaux, LA: $881
- Mobile, AL: $885
- Lake Charles, LA: $962
- Charleston, WV: $969
- Florence, SC: $984
- Huntington-Ashland, WV-KY-OH: $984
That being said, the data shows that property taxes rose more quickly than the national average in 74% of markets. Nashville had the biggest increase in property taxes, with a 27% rise compared to the previous year.