According to a recent report in a June 2016 article on the Forbes website, Bridgeport, Connecticut ranks number one among cities with the highest property tax rate. The statistics were compiled from a study from the Lincoln Institute of Land Policy in Cambridge, Massachusetts.
The Institute, which calculated the tax rate by taking a percentage of a property’s market value, discovered that residents in Bridgeport pay 3.88% on an average price home, much higher than the meager .30% paid in Honolulu, Hawaii. (Honolulu has the lowest property tax rate in all the 50 states.)
After Bridgeport, Connecticut, the cities of Detroit, Michigan and Aurora, Illinois came in second and third with rates of 3.81% and 3.72% respectively. On the lower side of the spectrum, Cheyenne, Wyoming and Denver, Colorado ranked just ahead of Honolulu with 0.65% and 0.66% tax rates.
The reason that tax rates are so high in Bridgeport is because property taxes are used in place of sales or income taxes, which are not assessed in that location. Therefore, people pay, on average, around $1,890 in tax per year.
Compare that amount with Birmingham, Alabama, which collects income and sales taxes and property taxes as well. Therefore, residents pay, on average, about $2,430 each annually. Therefore, when you look at the property tax rates, you have to consider the whole tax package. While Bridgeport, individually, assesses a high property tax rate, it also does not include sales and income taxes in its total tax charges per resident.
You also have to consider the price of the real estate. For example, Detroit charges an excessive property tax rate. However, its median home prices are among the lowest in the US. Compare their tax rate of 3.81% with New York City’s 1.13% rate – a city which is also known for its elevated prices for real estate.
The average property tax rate over 53 cites showed a rate of about 1.5% while lower-than-average rates were charged in Honolulu, Denver, Boston and Washington, D.C. The study found that Phoenix recorded the biggest increase in its property tax rate while Sioux Falls, South Dakota experienced the largest decline.
The Five Highest Property Tax Rates
- Bridgeport, Connecticut – 3.88%
- Detroit, MI – 3.81%
- Aurora, IL – 3.72%
- Newark, NJ – 3.05%
- Milwaukee, WI – 2.685
The Five Lowest Property Tax Rates
- Boston, MA – .67%
- Birmingham, AL – .66%
- Denver, CO – .66%
- Cheyenne, WY – .65%
- Honolulu, HI – .30%
Again, you cannot look solely at the property tax rates when you are assessing the costs. You also need to know what, if any tax, is charged for sales transactions or income and the market value for real estate. All these considerations must be made when you are budgeting for a house or working in a community.