I read on CNN's money website today that Westchester County, NY has the highest property taxes in America (see Nov 25 Money website). Moreover, the New York area in general seems to have the highest taxes. That surprises me, because, as an owner of a co-op in Brooklyn, I know that my property taxes, and property taxes in general in the city, are extremely low.
So what's the problem? If you click on the "interactive graph" you find that you can display results in two ways. The headline and accompanying map refers to the taxes in dollars. This type of information is little more than a graph of housing prices in the US, because expensive houses have higher taxes than cheaper houses. Sure, tax rate comes into play, but the owners of a $10 million mansion in a low tax district still generally pay more property taxes per year than the owners of a $200,000 house in a high tax district.
Here's an example. Click on Brooklyn on the interactive map and you will see taxes of $3,050. Click on Richland County, South Carolina (where my parents live), and you will see that taxes average $1,129, nearly one-third the "high" taxes of Brooklyn. Yet this belies the fact that housing prices are much higher in Brooklyn.
How much higher? Well, to see this, go to the interactive map that shows taxes as a percentage of home prices. This map accounts for different housing costs and shows taxes in the familiar manner, as a rate. In this map, you can see that Brooklyn property taxes are 0.53% of housing prices and Richland County's are 0.75%. (By the way Westchester County is 1.76%, which is high but certainly not the highest).
Thus, while taxes on the map shown in the headline are nearly three times higher in Brooklyn than in Richland County, S.C., taxes are actually 30% lower in Brooklyn, when looked at as a percentage of home prices.
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3 comments:
NYC also has a city tax, which is substantial. I am guessing your figure doesn't include that. This tax presumably pays for the things ---schools, garbage collection etc--that property tax pays for in other places.
NYC also has a city tax, which is substantial. I am guessing your figure doesn't include that. This tax presumably pays for the things ---schools, garbage collection etc--that property tax pays for in other places.
That's an interesting point--it would not apply to Westchester but would to Brooklyn. I don't know what city vs property taxes go to in NYC, but it is certainly true that city income tax is high in NYC and non-existent most places.
The lore here is that residential property taxes are kept low due to the large amount brought in from commercial properties, but I dont know whether that is true.
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