The Highs and Lows of U.S. Property Tax

Before civilization thought up monetary systems, taxes were paid based on the percentage of crops raised. In those days, patriotic tax collectors would have rhapsodized about “ample waves of grain.”

As a new report by RealtyTrac®, the nation’s leading source for comprehensive housing data, reminds us, the communities that produce the most revenue in property tax are no longer farming communities. RealtyTrac analyzed 2014 data from the nation’s Metropolitan Statistical Areas and found that the highest average property tax payment of $12,923 came in the urban centers of New York, Northern New Jersey and Eastern Pennsylvania. The MSA’s 19 million residents pay an effective tax rate of 2.65 percent on 7.5 million housing units.

The second highest per-property average payment is over in the Pennsylvania MSA around Reading. Here, the 411,000 residents, with 164,583 housing units, pay an effective tax rate a little over five percent, nearly double that of the New York/New Jersey/Eastern Pennsylvania, but the government’s yield is $9,200, about three-quarters what it is in the top-ranking MSA.

For balance, RealtyTrac has included the flipside of property tax totals with a list of the ten MSAs where the lowest average totals are paid. Topping the cellar dwellers, with an annual bill of less than $500 and an effective tax rate nearly six percent, is Fort Smith, Arkansas and portions of Oklahoma. This MSA has nearly 300,000 residents with about 129,000 housing units.

Next is the Montgomery, Alabama MSA, with 374,000 residents, 161,700 housing units, and average 2014 property taxes of $553.

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