Cities with the Lowest Real Estate Taxes

Cities with the Lowest Real Estate Taxes

Spring is typically a busy time in the real estate market – and this year the season appears to be off to a strong start.

New home sales rose 4.9 percent to an 11-month high in February, according to data released Friday by the Commerce Department. This comes as mortgage rates saw their biggest weekly drop in a decade.

But depending on where these new homeowners are, they may soon have to pay up a sizable chunk of change in real estate taxes.

Individuals in heavily populated metropolitan areas pay an average $9,400 in real estate taxes, according to the nation’s largest online lending marketplace, LendingTree. In rural areas, individuals pay an average of $2,600.

LendingTree examined how owning real estate impacts taxpayers across the country by looking at average property taxes, mortgage interest and mortgage insurance premiums. Researchers then narrowed down the data to find out where the overall real estate burdens were the lowest.

Here’s a look at the results:

1. Birmingham, Alabama

Percent of returns with real estate taxes: 26.5 percent
Average real estate tax amount: $2,035
Percent of returns with mortgage interest paid: 24.0 percent
Average mortgage interest paid: $7,455
Percent of returns with mortgage insurance premiums paid: 4.1 percent
Average mortgage insurance premium amount: $1,200

2. Louisville, Kentucky

Percent of returns with real estate taxes: 27.7 percent
Average real estate tax amount: $2,733
Percent of returns with mortgage interest paid: 24.2 percent
Average mortgage interest paid: $6,297
Percent of returns with mortgage insurance premiums paid: 4.3 percent
Average mortgage insurance premium amount: $1,227

3. Salt Lake City, Utah

Percent of returns with real estate taxes: 31.1 percent
Average real estate tax amount: $2,765
Percent of returns with mortgage interest paid: 27.8 percent
Average mortgage interest paid: $8,328
Percent of returns with mortgage insurance premiums paid: 6.6 percent
Average mortgage insurance premium amount: $1,758

4. Indianapolis, Indiana

Percent of returns with real estate taxes: 25.6 percent
Average real estate tax amount: $2,773
Percent of returns with mortgage interest paid: 22.97 percent
Average mortgage interest paid: $6,736
Percent of returns with mortgage insurance premiums paid: 4.23 percent
Average mortgage insurance premium amount: $1,210

5. Phoenix, Arizona

Percent of returns with real estate taxes: 27.8 percent
Average real estate tax amount: $2,835
Percent of returns with mortgage interest paid: 25 percent
Average mortgage interest paid: $8,988
Percent of returns with mortgage insurance premiums paid: 4.74 percent
Average mortgage insurance premium amount: $1,748

On the flip side, the metros with the highest real estate taxes are:

1. New York, New York

Average real estate tax amount: $10,202

2. San Jose, California

Average real estate tax amount: $9,626

3. San Francisco, California

Average real estate tax amount: $8,493


Source: "Cities with the lowest real estate taxes" Fox News (March 29, 2019)