Where Real Estate Taxes Are Highest – 2023 Study - SmartReads by SmartAsset

Whether an individual or family is just starting out as a first-time homebuyer, or retirees are paying off their retirement home, real estate taxes will be a required ongoing housing cost. This money is used to cover municipal costs, local infrastructure and other amenities. Local tax abatements and homestead exemptions may help homeowners with some of that cost, but even still it can add up to a significant amount over time.

With this continual homeownership cost top of mind, SmartAsset examined real estate taxes paid by homeowners across 330 U.S. cities to determine where it is highest relative to local home values.

Key Findings

Real estate taxes are over $10,000 annually in San Francisco, Santa Clara and Sunnyvale, CA. This is the highest average annual payment of real estate taxes studywide. Meanwhile, average home values range from $1.36 million to $1.58 million in these cities.
These Great Lakes cities have the highest property taxes relative to mortgage payments. Illinois, Michigan and Wisconsin rank in the top 10 most expensive real estate taxes when compared to monthly and annual payments toward the mortgage. In Aurora, Elgin and Naperville, IL, real estate taxes take up roughly 30% of payments toward the home. In Ann Arbor, MI, that figure is 28%, and in Madison, WI and Joliet, IL, it’s just over 27%.
Connecticut, New York and Illinois have the highest real estate taxes when compared to home values. Cities in these states make up eight of the top 10 most expensive places for real estate taxes, with Rockford, IL coming in first. Real estate taxes here make up more than 3% of the average home value.
Texas cities make up more than half of the top 50 most expensive places for real estate taxes. These include Pearland (2.31%), El Paso (2.30%), Edinburg (2.28%), Brownsville (2.08%), San Antonio (2.04) and Laredo (2.02%).
Relative to median home value, real estate taxes are cheapest in these cities. Montgomery, AL (0.37%); Colorado Springs, CO (0.40%); San Tan Valley, AZ (0.40%); Scottsdale, AZ (0.40%); and Cambridge, MA (0.41%) have the lowest effective real estate tax rates of large cities. At the same time, annual real estate taxes total less than $1,000 in Montgomery, Birmingham and Mobile, AL, along with Evansville, IN.

Top 10 Highest Real Estate Taxes Relative to Home Values

1. Rockford, Illinois
The median annual real estate taxes paid in Rockford is $3,283. Because Rockford has a particularly low median home value of $107,900, the effective tax rate works out to roughly 3.04%.

2. Waterbury, Connecticut
Waterbury homeowners pay an average of 2.75%. The median home value is $193,300, with median annual real estate payments totaling $5,324.

3. Bridgeport, Connecticut
Homeowners in Bridgeport pay a median $6,130 annually on real estate taxes. This accounts for 2.67% of the median $229,900 home value.

4. Aurora, Illinois
Aurora homeowners pay $6,128 annually in real estate taxes – 2.60% on a median home price of $235,800.

5. Elgin, Illinois
Elgin has the second-most expensive homes and real estate taxes in the top 10. The median home price came in at $244,900, with annual real estate taxes totalling $6,194 (2.53% of the median home value).

6. Rochester, New York
Homes in Rochester are relatively inexpensive, with a median home value of $112,000. The median annual real estate taxes total $2,806, or 2.51% of the home value.

7. Syracuse, New York
Median annual real estate taxes in Syracuse are $3,026, or 2.41% of the median home value ($125,600).

8. Peoria, Illinois
Peoria homeowners pay an average of 2.37%, which adds up to $3,402 in median annual real estate taxes for a home valued at $143,500.

9. Lansing, Michigan
In Lansing, the median annual real estate tax is $2,597. This is 2.32% on a median home value of $112,100.

10. Pearland, Texas
Pearland has the highest real estate tax and home value in the top 10. Homeowners here pay a median annual real estate taxes of $7,247, 2.31% on a median home value of $313,200.

Data and Methodology

Data comes from the U.S. Census Bureau’s 1-Year American Community Survey for 2021. Study includes 330 cities with greater than 100,000 in population. Specifically, cities are ranked by the median real estate taxes paid (by homeowners with a mortgage) as a proportion of the median home value, from highest to lowest.

Housing Tips

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Talk with an advisor. A financial advisor can help you set a budget, save for a down payment and ensure your home purchase aligns with your overall financial plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you.