Property Tax Hikes Leave Homeowners Facing Higher Costs Nationwide

Owning a home is often considered a milestone in the American Dream but it comes with growing financial responsibilities. A new report by LendingTree reveals that median property taxes in the U.S. surged by 10.4% between 2021 and 2023, fueled largely by climbing home values.

Property tax bills now average $2,969 annually nationwide roughly $247 a month but can vary wildly depending on location. In Birmingham, Alabama, the median tax is just $1,091, while homeowners in New York City face a staggering $9,937 bill.

Property Taxes Rising Everywhere

The study analyzed property tax trends in the 50 largest U.S. metro areas and found that taxes rose in every one of them between 2021 and 2023. Some saw modest increases Pittsburgh (4.4%), Philadelphia (8.2%), and Milwaukee (8.3%) while others experienced sharp jumps. Tampa led the way with a 23.3% spike, followed by Indianapolis (19.8%) and Dallas (19.0%).

Florida’s heavy reliance on property taxes to fund public services, especially in the absence of a state income tax, has driven much of the increase. Voters in Hillsborough County, which includes Tampa, approved a tax hike in 2024 to support schools and increase teacher pay further pushing rates up.

“Most households today have very little room in their budgets to absorb unexpected expenses,” said Matt Schulz, LendingTree’s chief consumer finance analyst. “Property tax hikes hit hard, especially when people are already stretched thin by inflation and higher living costs. Unlike discretionary expenses, you can’t just cancel your property taxes if money gets tight.”

With or Without a Mortgage, Property Taxes Add Up

Homeowners with mortgages tend to pay more in taxes $3,343 annually, on average compared to $2,474 for those who’ve paid off their homes. That $869 difference adds up, particularly when nearly 55% of mortgage holders report paying over $3,000 in annual property taxes.

On the flip side, 18.6% of mortgage-free homeowners pay less than $800 per year in taxes, compared to just 8% of those still making monthly payments.

Big Cities, Big Tax Bills

High-cost markets bear the brunt of property taxes. New York, San Jose, and San Francisco top the list with median annual taxes of $9,937, $9,554, and $8,156 respectively. These areas not only have high home values but also rely on property taxes for essential public services.

In contrast, cities like Birmingham ($1,091), Memphis ($1,856), and Louisville ($1,912) offer some of the lowest property tax burdens in the country, thanks in part to lower home values and state-imposed limits on tax increases.

Effective Tax Rates Tell Another Story

When measuring property taxes as a percentage of home value, some cities come out on top or bottom. Birmingham and Phoenix boast the lowest effective tax rates at 0.48%, meaning homeowners pay less tax relative to their property’s worth. By contrast, Buffalo (2.11%), Chicago (2.08%), and Cleveland (1.74%) have the highest effective rates, making taxes more of a burden relative to local incomes and home values.

The Bottom Line

Rising property taxes are an often-overlooked cost of homeownership, but they’re hitting wallets harder than ever especially for those with tight financial margins. While they help fund critical services like schools and infrastructure, they also create financial stress for many, particularly in high-tax metros.

And for homeowners already stretched by mortgage payments, insurance premiums, and maintenance costs, there may be little room left to breathe. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.