50-State Property Tax Comparison Study
As the largest source of revenue raised by local governments, a well-functioning property tax system is critical for promoting municipal fiscal health. This report documents the wide range of property tax rates in 2015 for more than 100 U.S. cities and helps explain why they vary so widely. This context is important because high property tax rates usually reflect some combination of heavy property tax reliance with low sales and income taxes, low home values that drive up the tax rate needed to raise enough revenue, or higher local government spending and better public services. In addition, some cities use property tax classification, which can result in considerably higher tax rates on business and apartment properties than on homesteads.
This study provides the most meaningful data available to compare cities’ property taxes by calculating the effective tax rate: the tax bill as a percent of a property’s market value. Data are available for 73 large U.S. cities and a rural municipality in each state, with information on four different property types (homestead, commercial, industrial, and apartment properties), and statistics on both net tax bills (i.e., $3,000) and effective tax rates (i.e., 1.5 percent). The information provided here has important implications for cities because the property tax is a key part of the package of taxes and public services that affects cities’ competitiveness and quality of life.
This is the latest in a series of annual reports produced in partnership with the Minnesota Center for Fiscal Excellence.
Table of contents
Why Property Tax Rates Vary Across Cities
Homestead Property Taxes
Commercial Property Taxes
Industrial Property Taxes
Apartment Property Taxes
Classification and Preferential Treatment of Homestead Properties
Property Tax Assessment Limits