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Analog alarm clock flanked by a stack of wooden blocks with the word "tax" and a small house figurine.

Property taxes climb 3.6 percent across U.S. to $339.8 billion

© iStock - supawat bursuck
Brett Rowland

(The Center Square) – Property taxes levied on single-family homes in the United States increased 3.6 percent to $339.8 billion in 2022, according to a new report from a real estate data firm.

That's up from $328 billion in 2021. The 2022 increase was more than double the 1.6 percent growth in 2021, but smaller than the 5.4 percent increase in 2020, according to the report from ATTOM, a property data provider.

The report also shows that the average tax on single-family homes in the U.S. increased 3 percent in 2022, to $3,901, after rising 1.8 percent in 2021. The latest average tax resulted in an effective tax rate nationwide of 0.83 percent. That was down slightly from 0.86 percent in 2021 to the lowest point since at least 2016. The "effective rates continued to decline even as total taxes rose because home values went up faster than taxes," according to the report.

"Property taxes continued their never-ending climb last year, with wide disparities continuing from one area of the country to another, connected to varying costs, services, and tax bases. But, on balance, the latest increase nationwide again was modest," said Rob Barber, chief executive officer at ATTOM. "This year, local governments and school systems will face even greater challenges keeping taxes in check, given rising inflation rates and a growing number of commercial properties that could be eligible for tax reductions after suffering a surge of vacancies during the pandemic."

The states with the highest effective property tax rates were New Jersey (1.79 percent), Illinois (1.78 percent), Connecticut (1.57 percent), Vermont (1.43 percent) and Nebraska (1.36  percent). Rounding out the top 10 were Pennsylvania (1.29 percent), New Hampshire (1.28 percent), Ohio (1.27 percent), New York (1.26 percent) and Iowa (1.25 percent).

At the other end: Hawaii (0.30 percent), Alabama (0.37 percent), Arizona (0.39 percent), Colorado (0.40 percent) and Tennessee (0.42 percent) with the lowest effective property tax rates in 2022.

The average property taxes varied significantly by state, from a high of $9,527 in New Jersey to a low of $928 in West Virginia. The average tax on single-family homes in the U.S. increased 3 percent in 2022 to $3,901, according to the report.

"Huge gaps in average tax bills around the U.S. remain in place," Barber said. "Those disparities are heavily connected to differences in local government and school services, public employee wages, economies of scale between large and smaller towns and the amount of commercial properties that help shoulder the local tax burden. Depending on what prospective buyers want in a community and its school system, the gaps can have a big impact on how easy or hard it is to sell a home."