Property taxes are a significant expense for homeowners across the United States. Depending on where you live, these taxes can either be a manageable part of your budget or a substantial financial burden. Understanding which cities have the highest and lowest property taxes can help you make informed decisions about where to buy a home or invest in real estate.
In this guide, we’ll explore the cities with the highest and lowest property tax rates, factors that influence these rates, and tips for managing property tax costs.
Understanding Property Taxes in the U.S.
Property taxes are levied by local governments (counties, cities, and school districts) to fund public services such as schools, roads, and emergency services. The amount you pay depends on two main factors:
Assessed Property Value – The local tax assessor determines the value of your home and land.
Local Tax Rate (Mill Rate) – Each jurisdiction sets its own tax rate, usually expressed as a percentage of the assessed value.
Because tax rates vary widely, homeowners in some cities pay significantly more than others—even if their homes have similar market values.
U.S. Cities with the Highest Property Taxes
Some cities are notorious for high property tax rates, often due to high local government spending, expensive public services, or a lack of alternative revenue sources (like income or sales taxes). Below are some of the cities where homeowners pay the most in property taxes.
1. Bridgeport, Connecticut
Average Effective Tax Rate: 2.05%
Median Home Value: $285,000
Annual Property Tax: ~$5,842
Connecticut has some of the highest property taxes in the nation, and Bridgeport leads the state. High taxes help fund local schools and municipal services, but they also make homeownership more expensive.
2. Rochester, New York
Average Effective Tax Rate: 2.40%
Median Home Value: $180,000
Annual Property Tax: ~$4,320
New York is another high-tax state, and Rochester has one of the highest effective rates. While home prices are relatively affordable, the tax burden can be steep for residents.
3. Aurora, Illinois
Average Effective Tax Rate: 2.32%
Median Home Value: $250,000
Annual Property Tax: ~$5,800
Illinois relies heavily on property taxes due to its lack of a progressive income tax system. Aurora’s taxes are among the highest in the Chicago metro area.
4. Newark, New Jersey
Average Effective Tax Rate: 2.18%
Median Home Value: $350,000
Annual Property Tax: ~$7,630
New Jersey has the highest average property taxes in the U.S., and Newark is no exception. High taxes fund schools and infrastructure but add to the cost of living.
5. Milwaukee, Wisconsin
Average Effective Tax Rate: 2.09%
Median Home Value: $220,000
Annual Property Tax: ~$4,600
Wisconsin’s property taxes are above the national average, and Milwaukee’s urban setting contributes to higher rates compared to rural areas.
U.S. Cities with the Lowest Property Taxes
If you’re looking to save on property taxes, some cities offer much lower rates—often due to alternative revenue sources (like tourism or oil/gas taxes) or lower government spending.
1. Honolulu, Hawaii
Average Effective Tax Rate: 0.28%
Median Home Value: $800,000
Annual Property Tax: ~$2,240
Hawaii has the lowest property tax rates in the U.S., partly because the state relies heavily on tourism taxes. However, home prices are extremely high.
2. Birmingham, Alabama
Average Effective Tax Rate: 0.48%
Median Home Value: $150,000
Annual Property Tax: ~$720
Alabama has some of the lowest property taxes nationwide. Birmingham offers affordability in both housing costs and tax rates.
3. Colorado Springs, Colorado
Average Effective Tax Rate: 0.52%
Median Home Value: $400,000
Annual Property Tax: ~$2,080
Colorado’s tax structure keeps property taxes low, and Colorado Springs benefits from this while offering scenic living.
4. Las Vegas, Nevada
Average Effective Tax Rate: 0.60%
Median Home Value: $350,000
Annual Property Tax: ~$2,100
Nevada has no state income tax and relies on sales and gaming taxes, keeping property taxes low for residents.
5. Charleston, South Carolina
Average Effective Tax Rate: 0.57%
Median Home Value: $300,000
Annual Property Tax: ~$1,710
South Carolina offers low property taxes and a relatively low cost of living, making Charleston an attractive place for homeowners.
Factors That Influence Property Tax Rates
Why do some cities have much higher taxes than others? Several key factors play a role:
Local Government Budget Needs – Cities with higher public service costs (e.g., schools, police, infrastructure) often have higher taxes.
State Tax Policies – Some states (like New Jersey) rely more on property taxes, while others (like Nevada) use sales or tourism taxes.
Home Values – In areas with skyrocketing home prices, local governments may keep rates lower since higher assessments still bring in revenue.
Exemptions & Deductions – Some states offer homestead exemptions or senior citizen discounts, reducing tax burdens for certain homeowners.
How to Lower Your Property Tax Bill
If you live in a high-tax area, you may still have options to reduce your bill:
✔ Challenge Your Assessment – If your home’s assessed value seems too high, you can appeal with your local tax assessor.
✔ Look for Exemptions – Many states offer breaks for veterans, seniors, or disabled homeowners.
✔ Pay Attention to Reassessment Cycles – Some areas reassess values every few years; timing a purchase right can help.
✔ Consider Location Before Buying – If taxes are a major concern, research rates before choosing a city.
Final Thoughts
Property taxes vary dramatically across the U.S., with some cities charging more than double the national average while others keep rates extremely low. If you’re planning to buy a home, factoring in property taxes can save you thousands over time.
For those in high-tax areas, exploring exemptions and assessment appeals can help reduce costs. Meanwhile, cities with low property taxes—like Honolulu or Birmingham—offer financial relief but may have trade-offs in home prices or local services.
At Avenza Land, we help homeowners and investors navigate real estate decisions with confidence. Whether you’re looking for a tax-friendly city or ways to manage your current property taxes, understanding these rates is key to smart financial planning.
Would you prefer lower taxes with higher home prices, or more affordable housing with higher taxes? Let us know in the comments!