How Much Are Property Taxes?

by Dennis Hartman
Improvements like a new roof can raise a home's property tax liability.


One of the biggest ongoing costs for homeowners is an annual property tax, which local governments collect to fund vital services such as public schools. To determine the amount of property tax, local governments consider several factors, including funding needs and the value of taxpayers' property.


Property tax is charged as a flat-rate percentage of a taxpayer's property value. Local governments, including states, cities and counties, collect property tax and are responsible for setting property tax rates. This means that tax rates, and amounts, vary widely. According to MSN Money, median property tax rates range from 0.14 percent in Louisiana to 1.74 percent in New Jersey. MSN also notes that populous states like California and New York have median property tax rates of 0.61 percent and 1.14 percent, respectively.

Rate Increases

Local governments may increase property tax rates for a number of reasons. One of the most common is to increase revenue during times of economic hardship, without which governments could be forced to reduce services and cut funding to schools. Cities that see a sudden influx of residents may also raise property tax rates to pay for improvements in infrastructure or government services for the new residents, or to moderate the pace of growth.


In order to levy property taxes based on the value of property, governments perform assessments to determine property values. Factors that figure into an assessment include the size and age of a home as well as the desirability of the neighborhood. Taxpayers may protest an assessment to request a lower home value and, subsequently, a lower tax liability.

Increasing Value

Homeowners themselves do many things that can increase the property tax they owe. Even when tax rates remain the same, improvements to the home or land can lead to a higher assessment and a higher tax. Items like a new roof, new siding, an addition or an out building, such as a shed or pool house, can greatly increase assessed value. Homeowners must balance the need to maintain a home's value, especially if they have plans to sell in the near future, with the probability of higher taxes following home improvements.

Tax Bills

Once local governments compute property tax by multiplying the assessed value of a property by the flat percentage rate, the taxpayer receives the bill. For example, homeowners with a $467,000 home (the median price in California, according to MSN) would pay around $2,800 in property taxes, according to the state's median 0.61 percent tax rate ($467,000 x 0.61 = $2,847.70). Residents of a high tax state like New Jersey might pay more than $6,000 on a home worth much less, while a low tax state like Louisiana might charge residents less then $200 for a home worth the state median price of $132,000 ($132,000 x 0.14 = $184.80).

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