Property Taxes where you are or invest?

Real Estate Broker · Austin, TX · Member since 2017 · 38 posts · 36 votes

I'm just now beginning to feel comfortable considering an out of state investment. Property taxes seem to be a topic of much conversation (I'm in TX)...so I'm curious to do a poll -- what are property tax rates like where you are/where you invest, and what are they based off of? And where are you?

For example -- in my area 2.23% on 100% of the assessed value.

**AND...GO!**

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Matt Mason

Investor · Los Angeles, CA · Member since 2013 · 231 posts · 260 votes

This is one area where CA doesn’t have high taxes (and also if you don’t make much money as the high income tax rates are for high earners). It is about 1.3% of assessed value, but assessed value can only increase by the yearly inflation rate or 2% whichever is lower. Over time this represents a big difference from market value. I’ve had my primary residence for 19 years and my property tax rate is now about 0.4% of market value. If I sold the buyer would pay three times what I pay. Oregon has a similar property tax cap, but not sure about any other states.

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Eric James
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
8y
In the area where I live (also in TX) property taxes range from 1.8-2.1% of assessed values. However, assessed values tend to be quite a bit below market values. I have family in Western NY who pay 4-5%.
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Charles Kennedy
Rental Property Investor · Philadelphia, PA · Member since 2015 · 213 posts · 160 votes
8y
I work in CRE and look at a lot of deals around the Southeast. Two deals I'm working on now are in Greensboro, NC and Ft. Lauderdale, FL. Millage rates there are 1.363% and 2.067%, respectively. Again, these are commercial properties (one retail, one office) so that likely makes things differ, but looks like they're not too far off Texas.
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Jaime Cruz
Katy, TX · Member since 2013 · 5 posts · 0 votes
8y
I'm in Houston area. I saw my clients have from 2.0% up to 3.8% last year.
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Katie Hanner
OP
Real Estate Broker · Austin, TX · Member since 2017 · 38 posts · 36 votes
8y
I'm curious to hear what others outside of Texas experience as well.
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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
In Cleveland my rental has about 1K worth of taxes and is worth under 50k. The one in Memphis is also about 1k for 75-80k value
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Henry J.
Monterey Park, CA · Member since 2014 · 157 posts · 80 votes
8y
@Katie Hanner
We pay about 1.9-2% of the county appraised value for both county and city tax at Memphis. A $75K house we would pay about $1500/year.
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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
8y
Property taxes are 2.38% in Baltimore City. In addition the tax assessments are high. However i would never consider property taxes alone. Despite high property taxes baltimore properties are quite profitable.
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Amy H.
Rental Property Investor · Richmond, VA · Member since 2017 · 295 posts · 229 votes
8y
Outside of Richmond, Virginia. We pay .91% between the county and town taxes based on 100% of county assessed value. I am feeling lucky compared to the others people are posting.
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Eric H.
Real Estate Solutions Provider · Baltimore, MD · Member since 2014 · 571 posts · 452 votes
8y
Originally posted by @Ned Carey:
Property taxes are 2.38% in Baltimore City. In addition the tax assessments are high. However i would never consider property taxes alone. Despite high property taxes baltimore properties are quite profitable.
To add to Ned's comment.......our tax rate is approximately $2.38 for every $100 of assessed value. Example: $100,000 assessed value = (100,000/100) x $2.38 = $2380
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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
8y
There are plenty of other things to consider such as percent assessment/special assessments and all sorts of Jazz. I will throw out a rough idea in Monroe county NY (Rochester)
An example which is quite common
Market value on that house is right in the $120,000 range
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Katie Hanner
OP
Real Estate Broker · Austin, TX · Member since 2017 · 38 posts · 36 votes
8y
@Ned Carey - I definitely don’t just consider property taxes. I was actually posting because Austin (TX in general) notoriously gets “dogged on” for high property taxes. Not just in the investment community but this is also a common complaint in my neighborhood fb group, for example.
But when I’ve put pen to paper, what I’m finding is that compared to other places that people of moved from, tax RATE isn’t that much different, and where their gripe really is coming from is that the AMOUNT of taxes they are paying is higher because the value of their home is higher.
Please don’t misunderstand, TX does have higher property taxes - and if I didn’t live here and get to take advantage of the zero state income tax that would definitely be a consideration for my RE investing — it just doesn’t seem to be quite AS bad as it the hype, from what I’m seeing (with a few exceptions).
I’d much rather want to make sure I’m investing in a solid market than whether prop tax is high or low —as long as my numbers work!
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Eric James
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
8y
I too am a bit surprised that there are other states (with income taxes) that are pretty similar to TX.
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Peter B.
Investor · Ogdensburg, WI · Member since 2016 · 273 posts · 351 votes
8y
The loweset I have is about 16 dollars a thousand. The most is about 28 dollars a thousand.
What is crazy is they are all about 15 minutes apart from each other. The more rural areas are in the lower end.
Property taxes are by far our largest expense... I think having a complete understanding of how the assessment process works where you invest is more important than just the areas tax rate.
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Sylvia B.
Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
8y
Originally posted by @Peter B.:

I think having a complete understanding of how the assessment process works where you invest is more important than just the areas tax rate.
Definitely! The millage rate on our rentals is something like 3.85 -- much higher than anything quoted so far, even for TX & NY. BUT! Residential properties in MO are assessed at 19% of appraised value. (Agricultural is 12% & commercial is 32%)
So taxes on a $100,000 house would be $731.50 if my memory of the millage rate is accurate.
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Ryan K.
Investor · Richmond, VA · Member since 2015 · 139 posts · 43 votes
8y
I’m in Chesterfield county where the rate is 0.95 percent of the full assessed value. The city of Richmond is a little higher at 1.25 percent and Petersburg is the highest locally I know of at 1.35 percent. A couple counties nearby are really low, Goochland county is around 0.55 and Louisa county around 0.72 I believe. These lower counties are generally offset by major commercial or industrial parks which help lower the residents real estate taxes.
One thing to add though is the fact we have personal property tax here, on items such as autos, boats, RVs, farm equipment, etc. This can add hundreds if not more to your tax liability in Virginia.
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Shawn Clark
Investor · Middle River, MD · Member since 2017 · 191 posts · 127 votes
8y
Originally posted by @Ned Carey:

Property taxes are 2.38% in Baltimore City. In addition the tax assessments are high. However i would never consider property taxes alone. Despite high property taxes baltimore properties are quite profitable.
Why not share the county rates? Baltimore COUNTY is like half that. I thought it was 1.1 in the county, but I haven't looked recently because I don't worry much about the taxes.
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Matt Mason
Investor · Los Angeles, CA · Member since 2013 · 231 posts · 260 votes
8y
This is one area where CA doesn’t have high taxes (and also if you don’t make much money as the high income tax rates are for high earners). It is about 1.3% of assessed value, but assessed value can only increase by the yearly inflation rate or 2% whichever is lower. Over time this represents a big difference from market value. I’ve had my primary residence for 19 years and my property tax rate is now about 0.4% of market value. If I sold the buyer would pay three times what I pay. Oregon has a similar property tax cap, but not sure about any other states.
3 Reply
Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
8y
Katie Hanner I love Austin but would not do anything other than by a small multi to house hack there. You guys are getting slaughtered by high taxes and high prices with rents that just don’t make investing there appealing. Other markets in the southeast and Midwest have much better cashflow and decent taxes compared to the high property taxes where you are.
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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
8y
@Shawn Clark
Because I don't know them, I don't do business in the county. Thanks for adding them
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Shawn Clark
Investor · Middle River, MD · Member since 2017 · 191 posts · 127 votes
8y
Originally posted by @Ned Carey:

@Shawn Clark
Because I don't know them, I don't do business in the county. Thanks for adding them
What??? The County is awesome. :)
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Nicole B.
Real Estate Agent · Baltimore, MD · Member since 2016 · 142 posts · 75 votes
8y
I'm in Baltimore as well, and taxes are high, but housing prices are low. Rentals are in high demand and there are still plenty of distressed properties for flips. It's a city worth looking into. Just make sure you create an LLC in MD to purchase the property to save yourself the 7.5% transfer taxes.
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Katie Hanner
OP
Real Estate Broker · Austin, TX · Member since 2017 · 38 posts · 36 votes
8y
@Jordan Moorhead, my post was certainly not an advertisement to invest in Austin. I'm very transparent about the what the Austin investment market looks like -- you aren't going to be a high cash-flow investor here right now at most price points, and if that is your primary investment goal - it probably isn't the right market for you. In my opinion, that has more to do with the appreciation we've seen in the market in the last 5 years than the tax rate.
But what I've been discovering as I learn more about other out-of-state areas is that the property tax portion (rate and assessment type) isn't super far off from many other areas. There are definite exceptions, but it's been interesting to me to learn that the hype seems higher than the reality, comparatively speaking. Especially from the standpoint of someone living in Texas who can take advantage of the zero state income tax. I love learning, so this has been a good education for me :)
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Katie Hanner
OP
Real Estate Broker · Austin, TX · Member since 2017 · 38 posts · 36 votes
8y
@Sylvia B. That is great! My parents in IL are taxed on 33% of assessed value, but just under 9% tax rate in their county. That is actually what spawned my curiosity originally. Because our home in Texas is appraised at about 3x what their home in IL is, yet our property taxes are just a little over 2x what theirs is....PLUS they have almost 5% state income tax.
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Matt Nolan
Watertown, MA · Member since 2016 · 53 posts · 42 votes
8y
I’m looking looking at $15.98 per $1,000 assessed on both of my properties, putting me at about $10,000 or so a year on each.
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Bettina F.
Investor · Post Falls, ID · Member since 2016 · 606 posts · 699 votes
8y
If you are investing OOS, remember that you may be required to pay state income taxes on the profit you earn in that state. For example, we initially lived in Washington (no state income tax, high property taxes) and had rental property in Idaho (6% state income tax, low property taxes). We had to file and pay Idaho state income tax on the money earned in Idaho. The tax man gets his pound of flesh, no matter what.
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