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 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.
RELATED: New report says property taxes here 9th highest
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 Cincinnati, Dayton and Columbus 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.”
A Journal-News analysis of property tax bills in Butler County showed the highest bill (based on a $100,000 home valuation) in the county is $2,616 — credits some homeowners receive were not factored into the bill — in Middletown. The lowest property tax bill, $1,272, on the same value was found in Wayne Twp.
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PROPERTY TAXES IN BUTLER COUNTY
Tax bills on a $100,000 home vary widely across Butler County:
Fairfield Twp.: $2,319
Liberty Twp.: $2,262
West Chester Twp.: $2,413
Source: Butler County Auditor’s Office
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Middletown’s effective tax rate is the highest in the county because the city lost almost $58.4 million in property value from 2011 through 2015, according to City Manager Doug Adkins, so adjustments had to be made.
“What happens in downturns is that they apply the factors to slowly reduce property value loss and therefore property tax loss. During big upswings, they apply the factors to slowly raise property taxes above the anticipated revenues,” Adkins said. “Since we are at the bottom of property value loss in the city and have hovered there for a few years, we are seeing the highest factor available in the tools to maximize property tax revenues, despite the loss in overall city real estate value.”
Adkins said there are three ways to lower the effective rate: add new housing; “significantly” upgrade a large portion of the city’s housing stock which drives up values; or let levies expire.
The condition of Middletown’s housing stock is an issue city leaders will begin discussing possible solutions for next month, he said.
In Hamilton, the taxes on a $100,000 home are $1,966. The city has undergone a rebirth over the past several years, with empty storefronts now sporting thriving establishments downtown and other new developments like the Marcum Apartments and Spooky Nook mega sports complex coming online.
Finance Director Tom Vanderhorst said the city has lost $195 million in property value since the Great Recession in 2008, which means fewer people are shouldering the tax burden so individual tax bills go up.
MORE: Mega sports complex coming to Hamilton
“Hopefully what we’ll see is as we have our growth that $195 million that we lost, I can see us in the next two or three years, with all the stuff we have in the pipeline, certainly regaining all that,” he said, but added too much growth too fast also has a downside.
“The real balancing act is what if you grow too fast and you have to build new schools, then you have to pass another bond issue and the tax bill goes up even more. It almost seems like if you can tread water with a little bit of growth to the point where it doesn’t overtax your schools, that seems to be the best model,” he said. “You want growth but not explosive growth.
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AVERAGE PROPERTY TAX BILLS BY COUNTY
Butler County: $2,685, based on an average home price of $173,734
Warren County: $3,595, based on an average home price of $244,555
Hamilton County: $3,463, based on an average home price of $191,413
Source: ATTOM Data Solutions
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One of the lowest effective rates in the county can be found in Oxford within the Talawanda school district, where the property tax bill for a $100,000 home is $1,513.
City Manager Doug Elliott said the low property taxes are due to the fact the school district also has an income tax to rely on to operate.
“Ohio is somewhat unique in that we allow school districts to collect an income tax,” Elliott said. “Not every school district collects an income tax, I think you’ll find it’s probably in the rural areas. But our Talawanda School District collects an income tax… I think probably one of the reasons ours (taxes) is a little low is because we have a school district that collects a one percent income tax.”
Elliott said income tax is the city’s biggest revenue generator and property taxes come in second. They have lost about $1 million a year due to state cuts.
Lakota Local Schools is the largest school district in the county — the school district declined to comment — serving Liberty and West Chester townships, and the owners of a $100,000 home there pay $2,262 and $2,413 respectively. Liberty Finance Director Michelle Greis said for every dollar paid in taxes in her township, the school district gets 74 cents, the township pulls in 12 cents, the county 10 cents and other taxing districts receive the rest.
The township is wrestling with how much and when they need to put a new fire levy question on the ballot, to stave off deficits in their growing township. The finance committee is recommending the trustees ask taxpayers for a new 3.75 mill continuous fire levy in November, a measure that would boost revenues $3.3 million. If voters approve the levy, the owner of a $100,000 home would pay an extra $131 or a total of $309 annually.
RELATED: 3.75 mill fire levy recommended in Liberty Twp.
Trustee Board President Christine Matacic told the Journal-News recently she was on the fence about the timing until she gets some questions answered. Waiting to catch valuation from new housing, especially the pricey Carriage Hill homes, might make sense.
“If we wait ‘til ‘18 what do we project the difference in our property values being,” Matacic said. “Would that mean that if we went in ‘18 we could go for a smaller levy, that’s what I need answered.”
West Chester Twp. Administrator Judy Boyko noted that while the township’s tax rate of 68.96 is the highest of all the townships in the county, only 14.5 of it is attributable to the township proper. The bulk of that amount are two voted on levies, a 7-mill police levy passed in 2010 and a 6-mill fire levy passed in 2006.
Boyko said taxes provide for services like fire, police and all the other things that make a community desirable to live in and sustainable. The thing about the bulk of property tax levies, whether people think they are over-taxed or not, she said is it is a choice.
“If one thinks that they pay high taxes in West Chester, when you compare West Chester or even Butler County to surrounding counties they may not be the highest,” Boyko said. “I think that the majority of the taxes paid are voted millage at least in West Chester, and taxpayers, we have a choice… If we would like to not pay as high taxes then we have the opportunity at the ballot to not vote for that particular service.”
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.
Staff writer Randy Tucker contributed to this report.