- The average property tax rose 2.7% in 2024 even as total collections decreased by 1.6%.
- National home values jumped 4.8%, but tax reassessments lagged behind.
- States like New Jersey averaged over $10K in annual property taxes, while West Virginia remained near $1K.
- Metro areas in Illinois had the highest effective tax rates in the U.S. in 2024.
- Nevada maintained a low-effective rate, making cities like Las Vegas favorable for investors.
In 2024, people who own property in the United States saw something strange: their individual home tax bills went up, but the total amount of property tax collected nationally went down. This seemed odd and confused many homeowners. They saw their taxes rise even though governments collected less overall. To help explain this, this article looks at the newest information on property tax trends in 2024. It covers how effective rates worked, how taxes differed by region, and what it meant for investing. It also gives advice on how to get ready for future taxes.
What Is the Average Property Tax in 2024?
In 2024, the average property tax bill for single-family homes in the U.S. went up to $4,172. This was a 2.7% rise from the $4,063 average in 2023[^1]. But even though homeowners paid more, the effective property tax rate actually went down a little. This rate is a better way to compare things because it divides the yearly tax by the home’s value. It fell slightly to 0.86% from 0.83% the year before.
It might seem strange that effective rates went down while tax bills went up. But it happened mostly because home values went up, and tax assessments didn’t catch up completely. When home prices rise faster than tax increases, the tax amount becomes a smaller percentage of the home’s value, even if the dollar amount is still higher. The average home price across the country went up a lot in 2024, and this caused the difference.
It’s important to know the difference between your home tax bill and the effective rate. This helps you figure out if you can afford the taxes and how much you really owe compared to what your home is worth.
Why Total Property Tax Collections Went Down Even Though Bills Were Higher
It might seem strange, but the total amount of property tax collected across the country in 2024 went down by 1.6% to $357.5 billion, even while individual homeowners’ bills increased. A few important things helped cause this drop:
1. Slower Property Sales
Fewer homes were sold in many places because interest rates were high and people found it hard to afford them. When homes don’t sell, they often don’t get reassessed, especially in places where that happens when a property is sold. And so, local governments didn’t get chances to raise taxable values along with how much the market grew.
2. Local Caps and Limits
Lots of states and counties have rules that limit how fast property values or tax bills can go up each year. For example, in California, Proposition 13 limits property tax increases to 2% a year unless the property is sold. In cities with similar rules, rising market values don’t automatically mean local governments collect more tax money.
3. Tax Rebates and Exemptions
Some areas gave temporary tax breaks or one-time money back to people because of inflation and money troubles after the pandemic. These steps lowered the total amount collected, even if the rules for setting taxes would have called for more.
4. Reassessment Lag
There’s a delay between when the market value of homes goes up and when tax offices officially reassess them. This delay causes bigger problems when values are rising quickly. Tax departments often use old data or do reassessments only every few years. This means their numbers don’t show how much values have gone up right now.
Put simply: Just because your tax bill went up doesn’t mean your local government collected more money at the same rate from everyone who pays taxes.
How Rising Home Values Change Your Home Tax Bill
A big reason for how property taxes played out in 2024 was that average home values across the country went up. They jumped 4.8% to $486,456. Ideally, local counties would reassess these homes based on what they’re worth today, and this would bring in more tax money. But things aren’t that simple.
What Home Value Means for Taxes
Many places have tax rules that purposely slow down or lessen the effect of rising home prices. These rules include:
- Assessment phase-ins: This is when only part of the higher value is used to figure out taxes in a single year.
- Homestead exemptions: These lower the value that taxes are based on for a main home.
- Equalization rates and freezes: Some counties temporarily stop tax increases for older people, veterans, or when people are having financial trouble.
Because of these things that slow down increases, your home’s higher market value might not turn into a full tax hike right away. Still, these higher values do make people expect local governments to collect more money. This causes some areas to slowly look at their tax rules again.
Tax Differences Across the Country: The Big Divide Between North and South
The difference in property tax rates and bills across the U.S. is still large depending on where you are. In 2024, times of high inflation and how local governments managed their money were different in different parts of the country. Here’s how those differences look:
States with the Highest Effective Property Tax Rates
These states had the highest effective property tax rates based on data for average single-family homes:
- Illinois: 1.87%
- New Jersey: 1.59%
- Connecticut: 1.48%
People who own homes in these states often pay a lot more compared to what their property is worth. These high rates are usually linked to needing money for local services like schools, pensions, and roads in crowded areas.
States with the Lowest Effective Property Tax Rates
- Hawaii: 0.33%
- Idaho / Arizona / Alabama: 0.41%
- Delaware: 0.43%
These low rates mean homes are cheaper to own each year, even if the cost of buying the home itself is high. People who invest or are retired often like these areas because they can save money on taxes over time.
How Much People Pay: States with the Highest and Lowest Home Tax Bills
Effective tax rates help explain things, but the total amount of money you pay matters more when you plan your spending. Even when the effective rate is low, high home prices can still lead to big tax bills.
States with the Highest Average Bills in 2024
- New Jersey: $10,135
- Connecticut: $8,402
- New Hampshire: $7,723
- Massachusetts: $7,720
In these states, even homeowners who aren’t wealthy face tax costs that are close to what people pay in very expensive areas somewhere else.
States with the Lowest Average Bills
- West Virginia: $1,027
- Alabama: $1,200
- Arkansas: $1,397
These states let people save a lot of money. This is especially true for families on a fixed income or investors who want to keep costs low for the homes they own.
City Tax Trends: Where Taxes Go Up or Down
Looking closer than state averages, individual city areas show big differences. This is because of local rules for assessments, how much cities budget for services, and tax limits.
Cities with the Highest Effective Tax Rates
- Rockford, IL: 2.06%
- Chicago, IL: 1.91%
- Peoria, IL: 1.89%
These cities have rates that are high even compared to their state averages. This might be because city budgets are tight or because they have older homes that need more services.
Cities with the Lowest Effective Tax Rates
- Salisbury, MD: 0.29%
- Tuscaloosa, AL: 0.33%
These are good places for homeowners who want to save money on yearly costs.
Cities Where Tax Bills Changed a Lot
- Raleigh, NC: +21.1%
- Honolulu, HI: +17.2%
- Charlotte, NC: –7.3%
- Atlanta, GA: –6.4%
These cities often saw these changes because of new ways of doing assessments, changes to tax rates, or changes in how local services were funded.
Looking at Las Vegas and Nevada
Las Vegas is still showing up as one of the best places in the country for good property taxes. In 2024, people like it because of:
- Limits on how much taxes can go up each year: Nevada law puts a cap on how much property taxes can rise from one year to the next. This keeps changes from being too big.
- Fast growth: New buildings and more people moving in spread out the tax cost better. This keeps big tax jumps from happening for people who already own homes.
- Good rules for businesses and investors: Lower property taxes help make the money coming in from rent higher compared to costs. This means better returns over time for both small landlords and large investors.
Steve Hawks, a top real estate agent in Las Vegas, says these tax rules make the city very popular with people moving from more expensive places like California or the Northeast.
Why Property Taxes Will Likely Go Up in Some Places
Local governments have to deal with running costs, fixing roads and buildings, and paying pensions. Property tax is still a very important way for them to get money. It’s often seen as more steady than taxes on sales or income, especially since it’s linked to things that don’t move, like homes.
Even in places with strict limits on tax increases, officials might find ways around them:
- Changing tax rates (millage rates)
- Looking at and lowering exemptions
- Making reassessments happen faster
- Taxing things like improvements or extra buildings separately
For homeowners, this means paying attention to what local councils say about getting money. Your home tax bill might still be set to go up.
Smart Investing: Property Taxes and Your Real Estate Plan
If you invest in real estate, you really need to understand property taxes. The tax situation where you plan to buy can greatly change how much money you make after costs, how you plan for the property to gain value, and how you finance the purchase.
How Taxes Affect Investing
- Less Cash Flow: Higher taxes mean less money left over each month from rent.
- Can’t Always Raise Rent: In markets where there’s a lot of competition, you can’t always raise the rent enough to cover higher taxes.
- Choosing Where to Buy: Smart investors might stay away from states or cities with high taxes. Instead, they look for places with steady rules and lower effective rates.
How to Question Your Tax Assessment
Do you think your home is being taxed unfairly? It happens more often than you might think. Here’s what you can do:
Steps to Take
- Check Your Assessment Notice: You usually get this once a year. Look for mistakes in details like the size of your house or lot.
- Compare with Neighbors: Look at similar homes nearby to see if your home’s value is about the same.
- Turn in a Formal Appeal: Every local area has rules and deadlines for this. Don’t wait too long.
- Look into Exemptions: Older people, veterans, and people who have owned their homes for a long time often can get tax breaks.
- Talk to a Real Estate Professional: Experts like Steve Hawks in Las Vegas can help you file appeals or think ahead about costs that might go up.
What Might Happen in 2025 and Later
Looking forward, home values will likely keep going up in many cities. This is because there aren’t enough homes for sale and people still want to buy. When values go up, even places with limits or delays on tax increases will eventually adjust taxes.
Things to watch for:
- Tax rates going up when budgets are set
- Changes in funding because of building roads or other big projects
- Talks about rules happening because homes are hard to afford
Paying attention to what’s happening in your area and keeping up with new laws can help you see changes coming and make plans.
What Steve Hawks Thinks: Why Planning for Taxes Is Key in Las Vegas
Steve Hawks, a top real estate expert in Las Vegas, says it’s very important to think about taxes when you buy a home or invest. He notes that people moving from states with high taxes, like California or New Jersey, “often show surprise—and then feel better—when they see how low Las Vegas property taxes are. It makes owning a home here easier to reach and keep up.”
His main advice: Always include property taxes in your thinking when you decide to buy. Don’t just think about it when you buy, but for years to come. That one monthly bill can be the reason you can’t buy a home or the reason you can keep it.
Understanding Property Tax Trends
What happened with property taxes in 2024 showed homeowners and investors that things can be complicated. When tax bills go up, it doesn’t always mean local governments are collecting a lot more money. Changes in how values are set, new laws, and shifts in home values all make the situation complex.
In states like Nevada and cities like Las Vegas, having lower taxes is a strong reason for people to move there or for investors to buy property. No matter where you are, understanding how your home’s taxes might change and keeping up with information can help you save a lot of money over the years.