Rounding out the 10 states with the highest effective property tax rates were New Jersey (2.31 percent), Illinois (2.13 percent); Texas (2.06 percent); New Hampshire (2.03 percent); and Vermont (2.02 percent); Connecticut (2 percent), Pennsylvania (1.89 percent); and New York (1.88 percent).
In the Dayton area, the effective property tax rate was 2.05 percent last year, or an average property tax of $2,730 on single family homes, ranking the local area’s tax rate No. 29 out of 217 metros surveyed, according to the report. In the Cincinnati metro area, the effective property tax rate last year was 1.47 percent — No. 71 among the metros surveyed — and the average property tax was $2,816.
Ohio and the local area are known as some of the most affordable housing markets in the country, but high property taxes — which remain a homeowner’s obligation even after a mortgage is payed off — can dissuade some potential buyers from closing the deal, according to Matthew Watercutter, a regional vice president at HER Realtors, which covers the Dayton, Columbus and Cincinnati markets in Ohio.
“Ohio in recent history has among the highest average property taxes in the nation,” Watercutter said. “By continually raising property taxes to support schools, as well as other infrastructure in lieu of other funding sources such as sales tax — which generates revenues from property owners as well as non-property owners — property taxes limit a buyer’s ability to purchase as well as the property’s ability to appreciate in value.”
Still, the local area’s relatively high property taxes have failed to cool down red-hot home sales, which set a record in the Dayton area last year, according to Karen O’Grady, president of the Dayton Area Board of Realtors.
“Folks who are buying now are already aware of the taxes,” O’Grady said. “But they feel like the school systems, the neighborhoods and the homes are a fair value for what the property taxes are, and we are continuing with a very strong market.”
The ATTOM report analyzed property tax data collected from county tax assessor offices nationwide at the state, metro and county level along with estimated market values of single family homes. The effective tax rate was calculated as the percentage of the homes’ market value that the annual property tax represented.
Nationwide, property taxes levied on single family homes in 2016 totaled $277.7 billion, an average of $3,296 per home, and an effective tax rate of 1.15 percent.
Typically, more populated, urban and suburban counties have a higher effective tax rate than their more rural counterparts, according to the report.
For example, the tax rate in Montgomery County — the Dayton area’s most populous county — was 2.35 percent last year, or an average annual property tax of $2,871. That was the 43rd highest tax rate out of 586 counties studied.
By comparison, the tax rate in rural Miami County was 1.17 percent, or an annual average tax of $1,748. That ranked Miami County 254 out of 586 counties.
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