Real Estate Investing & Property Tax Rates
In the United States, property tax is assessed by native authorities on the municipal or county degree. The property tax evaluation is predicated 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. However, the next data ought to provide help to find areas with excessive appreciation AND low property taxes.
Which States Have the Lowest Property Tax Rates?
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. Unfortunately, property values in Wyoming are usually fairly depressed, because of low inhabitants inflow and an absence of jobs. Also, Wyoming doesn’t rank extremely in terms of appreciation charges for residential and industrial actual property. Just as a result of an space has low property taxes doesn’t imply will probably be the perfect space to put money into (or relocate to).
What to Look For When Investing
Look for an space that has a constant charge of actual property appreciation, mixed with pretty low property taxes. Often, native property tax charges are low as a result of actual property appreciation within the space is low–so you want to watch out. Cities positioned subsequent to universities and areas the place companies are relocating are often glorious spots to purchase actual property. Paying consideration to inhabitants progress will help you see actual property developments and make wiser investments.
Medium-Sized Cities With the Lowest Property Tax Rates
According to knowledge gathered by the Office of the CFO in Washington, D.C., the next cities have the bottom property tax charges in 2006, based mostly on an annual revenue 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 City OK — $1,538
Kansas City, 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 City, UT — $1,904
Virginia Beach 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 Income Taxes & Property Tax Rates
States with no revenue tax (see record under) often have excessive property tax charges of their respective counties (The state must get its income from someplace!). However, the trade-off is that you’ll have zero taxes on all earned revenue. This is usually a large benefit. Instead of paying the state 7 to 15 p.c (or extra) of your revenue, you possibly can maintain 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 revenue on the state degree.
States With No Income Tax
*New Hampshire and Tennessee don’t tax earned revenue, however they DO tax capital good points (dividend and curiosity revenue).
How To Find the Best of Both Worlds: Low Property Tax & No State Income Tax
If you are on the lookout for the perfect of each worlds (low property tax and no state revenue tax), chances are you’ll need to contemplate the next cities:
Sioux Falls, SD
Las Vegas, Nevada
You also can discover much less well-known cities within the 9 “no-income-tax” states. Smaller cities and cities typically provide “quality of life” benefits, and higher-than-average value appreciation and progress.
Now you recognize which states do not tax revenue, and which areas have the bottom property tax charges. Armed with this information, you possibly can give attention to discovering the perfect spot to your subsequent dwelling or actual property funding.
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