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LendingTree Compares Median Property Taxes in 50 Largest U.S. Metro Areas

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Though it was pushed back due to the COVID-19 pandemic, the May 17 tax filing deadline is finally upon us. If you haven’t already filed and you’re a homeowner, that means you’re probably gearing up to pay some money toward real estate taxes.

How much you’ll end up paying can vary significantly depending on a variety of factors — from how much your home is worth to where you live.

To illustrate just how much variance there is in the amount of taxes people pay, LendingTree looked at the median amount of real estate taxes paid in each of the nation’s 50 largest metropolitan areas. In doing so, LendingTree found that homeowners in some metros can expect to pay thousands of dollars more per year than homeowners in other parts of the country.

Key findings

  • Real estate taxes can vary significantly across the nation’s 50 largest metros. The median real estate tax amount in Las Vegas — where homeowners pay the least in property taxes — is about $7,700 cheaper than in New York, where real estate taxes are highest.
  • Las Vegas and Birmingham, Ala., are the only two metros where median real estate taxes amount to less than $1,000 a year. The median property tax amount paid by homeowners is $696 in Las Vegas and $892 in Birmingham.
  • New York, San Jose, Calif. and San Francisco are the metros where homeowners pay the most in real estate taxes. Unsurprisingly, these metros known for their expensive real estate shell out a lot of money in property taxes each year. The median amount paid is $8,400 in New York, $7,051 in San Jose and $6,181 in San Francisco.
  • Real estate taxes are an average of $641 lower on homes without mortgages. Because property taxes are based in large part on home value and homes without mortgages tend to be worth less than those with mortgages, it makes sense why this is the case. Nonetheless, real estate taxes on homes without a mortgage can still be pricey, especially in areas like Salt Lake City and Seattle.

Metros with the lowest real estate taxes

No. 1: Las Vegas

  • Median real estate tax paid – all homes: $696 
  • Median real estate tax paid – homes with a mortgage: $928 
  • Median real estate tax paid – homes without a mortgage: $573 

No. 2: Birmingham, Ala.

  • Median real estate tax paid – all homes: $892 
  • Median real estate tax paid – homes with a mortgage: $958 
  • Median real estate tax paid – homes without a mortgage: $727 

No. 3: New Orleans

  • Median real estate tax paid – all homes: $1,313
  • Median real estate tax paid – homes with a mortgage: $1,473
  • Median real estate tax paid – homes without a mortgage: $1,053 

Metros with the highest real estate taxes

No. 1: New York

  • Median real estate tax paid – all homes: $8,400
  • Median real estate tax paid – homes with a mortgage: $8,627
  • Median real estate tax paid – homes without a mortgage: $7,951 

No. 2: San Jose, Calif.

  • Median real estate tax paid – all homes: $7,051
  • Median real estate tax paid – homes with a mortgage: $7,948
  • Median real estate tax paid – homes without a mortgage: $4,594 

No. 3: San Francisco

  • Median real estate tax paid – all homes: $6,181
  • Median real estate tax paid – homes with a mortgage: $6,895
  • Median real estate tax paid – homes without a mortgage: $4,120 


Tax tips for homeowners

Though there are tax breaks for expenses including real estate taxes and the amount of money you pay in mortgage interest, you’ll need to itemize your taxes to take advantage of them.

While itemization can save some people money, it can also be more of a hassle than taking the standard deduction. Furthermore, many people will likely save the same, if not more, by just taking the standard deduction.

Keep the following tips in mind when filing your tax return.

  • To make itemizing a tax return worth it, a person’s deductible expenses must be higher than their standard deduction. For the 2020 tax year, the standard deduction amount is $12,400 for single taxpayers, $24,800 for married taxpayers filing jointly and $18,650 for head of household taxpayers.
  • There are limits to how much people can deduct for home-related expenses, even if they itemize their tax returns. The total amount that can be deducted for all state and local taxes, which includes real estate taxes, is $10,000 for single taxpayers, or $5,000 for married people filing separately.
  • While higher refunds issued under the current tax code can help people who are struggling to pay property taxes or mortgage interest costs, there are often better ways to manage these expenses. Ultimately, people who may be chronically overburdened by high real estate taxes or mortgage interest fees are better off looking at alternative ways of easing this burden, as opposed to solely relying on their federal tax refund. For example, moving to a less-expensive area like Birmingham, Ala., can help alleviate costs associated with owning a home. Another option is securing a mortgage refinance to help lower overall mortgage costs.

Methodology

LendingTree used data from the U.S. Census Bureau’s 2019 American Community Survey with five-year estimates to determine the median real estate tax amounts for homes in the nation’s 50 largest metropolitan statistical areas, or “MSAs.”

The Census uses the term “real estate tax” to define tax that is charged on the “entire property, (land and buildings) payable to all taxing jurisdictions, including special assessments, school taxes, county taxes and so forth.” This term is often referred to as “property tax,” and both terms are used interchangeably throughout LendingTree’s study.

LendingTree senior research analyst Jacob Channel contributed to this report.

 

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