Unsurprisingly, the spike in home values meant that property tax collections increased in 2021, compared with 2020, according to information compiled and analyzed by Attom, a real estate data analysis firm. Attom’s researchers reviewed property tax data for nearly 87 million homes in the United States and found that $328 billion was levied, up 1.6 percent from the $323 billion in 2020. Despite the price increases on homes in 2021, this was the smallest rise in property tax bills over the past years and down from the 5.4 percent increase between 2019 and 2020.
The discrepancy between the home price increase of 16 percent in 2021 from 2020 and the much smaller increase in property tax bills is likely a reflection of the lag in tax assessments, according to Rick Sharga, executive vice president of market intelligence at Attom. In other words, homeowners may see their property taxes rise higher in 2022.
The average tax bill on single-family homes in the United States increased at the smallest rate in the past five years, up 1.8 percent from $3,719 in 2020 to $3,785 in 2021. The effective tax rate, which refers to the average annual property tax expressed as a percentage of the average estimated market value of homes, was 0.9 percent in 2021, down from 1.1 percent in 2020. Because home values rose much more quickly than tax rates, the effective tax rate declined.
In 74 percent of the 220 metro areas analyzed by Attom, the increase in the average property tax bill was higher than the national average of 1.8 percent.
Where property taxes are highest
In New Jersey, the average single-family home tax was $9,476 in 2021, the highest in the nation. Other states among the top five highest include Connecticut ($7,464), Massachusetts ($6,777), New Hampshire ($6,698) and New York ($6,617).
Where property taxes are lowest
The state with the smallest average tax bill was West Virginia at $901 in 2021. Other states among the five with the lowest property tax bills included Alabama ($905), Arkansas ($1,195), Mississippi ($1,243) and Louisiana at $1,248.
D.C.-area property taxes
In counties near Washington, D.C., the average property tax bill was $9,526 in Arlington, Va.; $8,942 in Fairfax County, Va.; $6,837 in Montgomery County, Md.; $6,243 in Washington, D.C. and $4,741 in Prince George’s County, Md.
The effective tax rate in those areas range from a high of 1.01 percent in Prince George’s County to 0.93 percent in Fairfax County, 0.85 percent in Arlington County, 0.79 percent in Montgomery County and 0.55 percent in D.C.