Metros Where Homeowners Pay The Lowest And Highest Property Taxes

Although it is often said that nothing is certain except death and taxes, how much homeowners pay in property taxes varies significantly and can be influenced based on the home’s worth and location, among other things.

With the federal income tax filing deadline quickly approaching, taxes are on many people’s minds. To illustrate the considerable differences in homeowners’ property taxes, online loan marketplace LendingTree analyzed the median amount paid annually in each of the nation’s 50 largest metropolitan areas to pinpoint metros with the lowest property taxes and highest property taxes.

The survey found that homeowners in some metros can expect to shell out thousands of dollars more a year in property taxes than homeowners in other parts of the country.

For example, annual median property taxes in Birmingham, Alabama, where homeowners pay the least in real estate taxes — are about $7,700 cheaper than in the New York metro area, where they are the highest.

Plus, Birmingham is the only metro where median property taxes are less than $1,000 a year. The median amount of property taxes paid by homeowners in Birmingham is only $909. For comparison, residents in the next two metros with the lowest median real estate taxes — New Orleans and Louisville, Kentucky — owe $1,345 and $1,563 a year, respectively.

New York, San Francisco and San Jose, California are the metros where homeowners shell out the most money in property taxes every year. The median amount paid is $8,602 in New York, $6,508 in San Francisco and $7,471 in San Jose, California.

Median property taxes on homes without a mortgage are 18% less expensive, on average, than on homes with mortgages. There are various reasons for this, ranging from home values tending to be less expensive on homes without a mortgage to some states having tax exemptions or reductions for older homeowners who may be more likely to own their home outright. Salt Lake City and Seattle — the two metros where median property taxes are slightly higher for homes without a mortgage — illustrate there are exceptions.

“Remember that if you’re overburdened by property taxes, or just think that you’re paying too much, you can challenge your assessment,” says Jacob Channel, LendingTree’s senior economic analyst and the report’s author. “While this doesn’t guarantee that your bill will go down, it can help shed some light on why the government is saying you owe what you do. And, in the best case scenario, you could end up paying less in taxes.”

There are limits to how much people can deduct for home-related expenses. The total amount that can be deducted for all state and local taxes, including property taxes, is $10,000, or $5,000 for married taxpayers filing separately.

“Ultimately, people who feel home costs chronically overburden them may be better off looking at alternative ways of easing their burden rather than relying on tax breaks on their returns,” explains Channel. “For example, refinancing your mortgage could help you lower your monthly housing payments depending on the rate you can get.”