Vermont’s “effective” property tax rate on single-family homes is fourth highest in the nation, according to an April 6 analysis of 2022 property taxes nationwide.
The effective tax rate is the average annual property tax expressed as a percentage of the average estimated market value – not necessarily the assessed value. The report found that nationwide, the effective tax rate declined as actual SF home values skyrocketed even as local governments struggled to keep pace with fair market value assessments.
In short – even though the actual tax rate increased three percent nationwide, it didn’t keep pace with the 7.9% increase in the actual value of single family homes.
In Vermont, Windham County – the closest to urban centers like Boston and New York – saw the largest increase in effective property tax rate. Rural Orange and Caledonia counties ranked second and third. Chittenden and Lamoille (home of Stowe) had the two highest average home valuations but ranked near the bottom in effective property tax rate.
States with the highest effective property tax rates in 2022 were New Jersey (1.79 percent), Illinois (1.78 percent), Connecticut (1.57 percent), Vermont (1.43 percent) and Nebraska (1.36 percent). Other states in the top 10 for highest effective property tax rates were Pennsylvania (1.29 percent), New Hampshire (1.28 percent), Ohio (1.27 percent), New York (1.26 percent) and Iowa (1.25 percent).
A 2022 property tax analysis for 87 million U.S. single family homes by real estate research firm ATTOM shows that $339.8 billion in property taxes were levied on single-family homes in 2022, up 3.6 percent from $328 billion in 2021. The increase was more than double the 1.6 percent growth in 2021, although smaller than the 5.4 percent increase the prior year.
The report also shows that the average tax on single-family homes in the U.S. increased 3 percent in 2022, to $3,901, after rising 1.8 percent the previous year.
The latest average tax resulted in an effective tax rate nationwide of 0.83 percent. That was down slightly from 0.86 percent in 2021 to the lowest point since at least 2016.
The report analyzed property tax data collected from county tax assessor offices nationwide at the state, metro and county levels, along with estimated market values of single-family homes calculated using an automated valuation model (AVM). The effective tax rate was the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area.
In 2022, effective rates continued to decline even as total taxes rose because home values went up faster than taxes yet again around the country last year. Despite a stall in the nation’s decade-long housing market boom in 2022, the average single-family home estimated value still rose 7.9 percent over the year. That surpassed the average tax increase, resulting in the small dip in effective rates.
|County||Average market (not necessarily assessed) value of SF home||Average SF Home tax bill||Effective tax rate|
The downward trend in effective rates could easily reverse if a drop in home values that began in the second half of last year and continues in 2023. Prices have started to decline amid mortgage rates that have doubled, high consumer price inflation and other forces that have cut into what home seekers can afford.
Actual taxes property paid, as opposed to the effective tax rate, show a different set of national winners and losers.
States in the Northeast region had seven of the 10 highest average property taxes in the U.S. in 2022. They were led by New Jersey, where the average single-family-home property tax of $9,527 in 2022 was more than 10 times the average of $928 in West Virginia, which had the nation’s smallest average levy. Others states in the top five last year were Connecticut ($7,671), Massachusetts ($7,044), New Hampshire ($6,855) and New York ($6,673).
The 10 states with the lowest average tax in 2022 were all in the South. Aside from West Virginia ($928), the lowest were in Alabama ($1,022), Arkansas ($1,228), Louisiana ($1,296) and Mississippi ($1,311).
Data for Vermont taxes paid was not available in the April 6 ATTOM statement.