10 Cities Where Real Estate Taxes Are Extra High
Buying a home is already a big financial commitment. On top of that, the taxes that come with it can be a real burden in your bank account. From first-time homebuyers to retirees, real estate taxes are an ongoing cost for practically everyone who owns a house.
However, in certain cities, this burden is notably more significant.
Home Sweet Home
Real estate taxes, used to cover municipal costs, local infrastructure, and other amenities, can add up significantly over time. SmartAsset examined real estate taxes paid by homeowners across 330 US cities relative to local home values to determine which cities have the highest burden.
1: Rockford, Illinois
While Rockford boasts a particularly low median home value of $107,900, its real estate taxes pack a punch. Homeowners in the Illinois-based city pay a median of $3,283 in annual real estate tax, totaling an effective tax of 3.04% of the median home value.
2: Waterbury, Connecticut
With lots of natural beauty and access to major metro areas, Waterbury, Connecticut, is a favorable place to buy a home. On average, homes in the city are valued at $193,300, and the median annual real estate payments total $5,324. Waterbury homeowners pay a hard-to-swallow average of 2.75% in effective real estate taxes.
3: Bridgeport, Connecticut
Following closely behind Waterbury is another charming Connecticut city: Bridgeport. People who call this city home pay a median of $6,130 yearly in real estate taxes, a 2.67% effective tax of the median home value ($229,900).
4: Aurora, Illinois
Nestled in the Chicago metropolitan area, Aurora is a relatively more affordable option than its big city neighbor. With a median home price of $235,800, Aurora homeowners pay an average of $6,128 annually in real estate taxes. That comes out to an effective tax of 2.60% of the median home price.
5: Elgin, Illinois
Clocking the second-most expensive homes and real estate taxes in the top ten, Elgin is not easy on homeowners’ wallets. An average house in the area will run you about $244,900, and real estate taxes for those properties totaled $6,194, or 2.53% of effective tax of the median home value.
6: Rochester, New York
Listed as the third-best place to live in New York by U.S World & News Report, there are several perks to living in Rochester, but high real estate taxes aren’t among them. SmartAsset reports homes in this Upstate New York city as relatively inexpensive, with a median home value of $112,000. This means homeowners are paying a total median of $2,806 in annual real estate taxes, which comes out to a hefty 2.51% in effective tax.
7: Syracuse, New York
Not only does Syracuse host a lively college scene, but it’s also a popular place to settle down and buy a home. The problem? It’ll come at a steep real estate tax cost. Median annual real estate taxes in Syracuse are some of the highest in the country, at $3,026. This equates to a 2.41% effective tax on the median home value of $125,600.
8: Peoria, Illinois
With a population of 113,672, Peoria offers a dense suburban feel where many residents own their homes. Homeowners in Peoria pay an average of 2.37% effective real estate tax, totaling an average of $3,402 per house annually. The average home is valued at $143,500.
9: Lansing, Michigan
Many folks love living in the capital of Michigan, where high-rated schools, safe neighborhoods, and family-friendly activities abound. The median annual real estate tax in Lansing is $2,597. With a median home value of $112,100, the average homeowner pays 2.32% in effective real estate taxes annually.
10: Pearland, Texas
With the highest home value in the top ten, Pearland leaves many unsuspecting homeowners pinching pennies. Homeowners in this suburban Texas city pay $7,247 in median annual real estate taxes. That totals an effective real estate tax of 2.31% on a median home value of $313,200.
All That Glitters
Cities in the Golden State, including San Francisco, Santa Clara, and Sunnyvale, came out on top with the highest average annual payment of real estate taxes. With average home values ranging from $1.36 million to $1.58 million, homeowners pay over $10,000 annually in real estate taxes.
Texas-sized Taxes
If you want to become a homeowner in the Lone Star State, you should know that Texas cities make up more than half of the top 50 most expensive places for real estate taxes. Cities among this list include Pearland (2.31%), El Paso (2.30%), Edinburg (2.28%), Brownsville (2.08%), San Antonio (2.04) and Laredo (2.02%).
Sweet Home Alabama
Those seeking reprieve from pricey real estate taxes should look at buying a home in Montgomery, AL; Colorado Springs, CO; and Cambridge, MA, which have the lowest effective real estate tax rates of large cities in the study. In addition, annual real estate taxes total less than $1,000 in Montgomery, Birmingham, and Mobile, Alabama.
Apples to Oranges
Compared to monthly and annual payments towards the mortgage, homeowners are paying the highest property taxes in multiple Great Lakes cities. In Aurora, Elgin, and Naperville, Illinois, real estate taxes take up roughly 30% of payments toward the home.
Those Sweet Keys
According to the National Association of Real Estate Brokers (NAREB), people over the age of 30 are more likely to be homeowners than renters.
Boomers to Millennials
The NAREB also found that in 1980, far more young people owned their own homes than Americans of the same age group today. With housing prices rising about $36,000 in 2022 compared to 2021 alone, it’s no wonder so many young people are still renting or living at home.
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