Actual Property Investing & Property Tax Charges

In the USA, property tax is assessed by native authorities on the municipal or county degree. The property tax evaluation relies on two values–the worth of the land, and the worth of the constructing. Since property tax is calculated at a local-level–and since modifications happen frequently–it’s difficult to find out the precise spots the place property tax is the bottom. Nevertheless, the next info ought to enable you find areas with excessive appreciation AND low property taxes.

Which States Have the Lowest Property Tax Charges?

County tax charges are sometimes averaged right into a single determine, and this quantity is used when evaluating property taxes between states. Surprisingly, Wyoming has the bottom property tax charges. Sadly, property values in Wyoming are typically fairly depressed, as a result of low inhabitants inflow and a scarcity of jobs. Additionally, Wyoming doesn’t rank extremely with regards to appreciation charges for residential and industrial actual property. Simply because an space has low property taxes doesn’t imply it is going to be one of the best space to put money into (or relocate to).

What to Look For When Investing

Search for an space that has a constant charge of actual property appreciation, mixed with pretty low property taxes. Usually, native property tax charges are low as a result of actual property appreciation within the space is low–so you’ll want to watch out. Cities positioned subsequent to universities and areas the place companies are relocating are often wonderful spots to purchase actual property. Listening to inhabitants progress might help you see actual property tendencies and make wiser investments.

Medium-Sized Cities With the Lowest Property Tax Charges

In line with knowledge gathered by the Workplace of the CFO in Washington, D.C., the next cities have the bottom property tax charges in 2006, primarily based on an annual earnings of $75,000. Assuming you earn $75,000 yearly, listed here are the property tax quantities you’ll pay in every metropolis…

Birmingham AL — $988

Cheyenne WY — $1,108

Phoenix AZ — $1,248

Wichita KS — $1,309

Denver CO — $1,362

Charleston WV — $1,395

Oklahoma Metropolis OK — $1,538

Kansas Metropolis, MO — $1,595

Little Rock AR — $1,648

Louisville, KY — $1,713

Jacksonville FL — $1,744

Honolulu HI — $1,781

Billings MT — $1,864

Salt Lake Metropolis, UT — $1,904

Virginia Seashore VA — $1,918

Jackson MS — $1,971

Charlotte, NC — $2,021

Boise, ID — $2,176

Columbia SC — $2,214

Las Vegas NV — $2,225

Sioux Falls SD — $2,228

New Orleans, LA — $2,231

Wilmington DE — $2,416

Memphis TN — $2,501

Albuquerque NM — $2,517

Houston TX — $2,861

The Connection Between State Earnings Taxes & Property Tax Charges

States with no earnings tax (see checklist beneath) often have excessive property tax charges of their respective counties (The state must get its income from someplace!). Nevertheless, the trade-off is that you should have zero taxes on all earned earnings. This is usually a large benefit. As a substitute of paying the state 7 to 15 p.c (or extra) of your earnings, you may preserve your hard-earned cash, and make investments it again into actual property or different investments. There are at present 9 states that don’t tax earnings on the state degree.

States With No Earnings Tax




South Dakota




New Hampshire*


*New Hampshire and Tennessee don’t tax earned earnings, however they DO tax capital good points (dividend and curiosity earnings).

How To Discover the Better of Each Worlds: Low Property Tax & No State Earnings Tax

In the event you’re on the lookout for one of the best of each worlds (low property tax and no state earnings tax), you might wish to think about the next cities:

Sioux Falls, SD

Houston, Texas

Jacksonville, Florida

Memphis, TN

Cheyenne, WY

Las Vegas, Nevada

You too can discover much less well-known cities within the 9 “no-income-tax” states. Smaller cities and cities usually supply “high quality of life” benefits, and higher-than-average worth appreciation and progress.


Now you already know which states do not tax earnings, and which areas have the bottom property tax charges. Armed with this information, you may concentrate on discovering one of the best spot in your subsequent dwelling or actual property funding.

Source by Michelle Taylor