You Think You Have It Bad? Property Taxes Even Higher Up North

boca raton home

Luxury Florida homes often come with celebrity-sized property tax bills

Many of us who live in South Florida think we pay a lot in real estate taxes and love to complain every November when that big tax check is due. We had several clients writing big property tax checks last week. (Don’t forget, our state does not have income taxes, which means lawmakers have to fill those state coffers in other ways).

But according to new research by the Tax Policy Center and the Urban Institute, we don’t have it so bad after all.

In Palm Beach county, where our office is located, our annual real estate taxes are 1.13% of actual home values each year. (Tax rates are officially about 2% of appraised value, but since most houses are assessed at less than market value, the real tax rates are lower).

Broward county (Ft. Lauderdale) comes in a little higher at 1.16%, and Miami Dade at 1.11%.

Some states take less of a bite, and in fact, average property taxes across the U.S. clock in just below the 1% mark.

Los Angeles county, for example, is taxed at only 0.65% of market value, but let’s not forget they have big state income taxes that push up their overall tax burden.

Of course, some states have super-sized their real estate tax bills, making homeownership a painful affair.

“The states with the highest average property tax burden as a share of housing price are New Jersey (2.0 percent), Texas (1.9 percent), and New Hampshire (1.9 percent),” writes the Christian Science Monitor.  Some counties are well above that.  Allegany county in New York has a hefty 2.7% tax rate,  Merrimack county in New Hampshire tops out at 3.01%, and Lake county Illinois, outside Chicago, is almost 2.4%.

Regardless of where you live, property taxes are significant, making up about one-quarter of total home ownership costs.

If you are in the market for a new home, make sure you estimate your future taxes when determining how much house you can afford. In Florida, the former owner’s tax bill is not a good indication of what you’ll pay, since homestead status, “Save Our Homes” tax caps, and changes in assessed value can unfortunately distort property tax bills.

Tip:  Want to see how your tax rates stack up?  Check out CNN Money’s interactive chart.

 

 

 

 

 

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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