January 17, 2022 - 1:15 pm
Ask any homeowner about expenses and they’ll tell you: If you’re a first-time buyer, you need to carefully calculate the total cost of owning a home before taking the plunge into homeownership.
Owning a home comes with dozens of additional costs, from mortgage payments and interest to upkeep, renovations, and household utility bills. It doesn’t take long before expenses add up—especially when they come on top of potential property tax costs.
To determine which states offer the lowest in property taxes, Roofstock analyzed 2021 data from Wallethub and the U.S. Census Bureau. Costs were then determined for real estate property tax rates, median real estate tax payments, and median home prices for every state and Washington D.C. These amounts were then contextualized with what first-time homebuyers need to know about property taxes.
Nevada by the numbers
– Effective real estate tax rate: 0.60%
– Annual taxes on $217.5k home: $1,310
– Nevada’s median home value: $267,900
– Annual taxes on Nevada’s median home: $1,614
You may be able to blow a ton of money in Las Vegas, but homeowners in this state don’t have to roll the dice on real estate taxes.
Nevada has one of the lowest real estate tax rates in the nation, in major part because homeowners are protected from steep property tax increases by Nevada’s property tax abatement law that limits annual property tax bill hikes to a maximum of 3% across the state.
There are other factors at play, too, including the fact that the assessed value of a home in Nevada is equal to just 35% of the taxable value. What that means is if the county assessor decides your home’s taxable value is $200,000, you’ll pay real estate taxes on just 35% of that value, or $70,000. When the low assessed value is coupled with the property tax abatement law, it equates to a very low effective real estate tax rate across the board for homeowners in Nevada.
In some states, the high cost of property taxes can cause a home with an otherwise affordable price tag to be well out of someone’s price range. In others, the low cost of property taxes could give you a little more wiggle room in your budget—which is never a bad thing.
If the idea of weighing the estimated costs of property taxes seems overwhelming to you, start by looking at the states with the lowest property taxes listed below. The national list is reverse-ordered by effective real estate tax rate, with Hawaii as the state with the lowest property taxes, though the results would look different if it was ordered by the taxes on the state’s median home. Whether you’re looking for a dream home or next big investment, owning a home comes with several additional costs, property taxes being one of them.
States with the lowest property taxes
#1. Hawaii: 0.28% effective real estate tax rate
#2. Alabama: 0.41% effective real estate tax rate
#3. Colorado: 0.51% effective real estate tax rate
#4. Louisiana: 0.55% effective real estate tax rate
#5. Washington, D.C.: 0.56% effective real estate tax rate
This story originally appeared on Roofstock and was produced and distributed in partnership with Stacker Studio.