In many areas of the country, homeowners are feeling the squeeze as property taxes climb at a faster clip than inflation.
In 2025, the average owner of a single-family home, with an estimated value of $494,231, paid $4,427 in taxes, according to a recent study from ATTOM, a provider of property data. That’s a 3% increase from the previous year, compared with a 2.7% inflation rate in 2025.
The study, which analyzed property tax data collected from county tax-assessor offices throughout the country, found that some areas saw significantly steeper increases in average tax bills. Large metro areas that had the biggest year-over-year hikes in 2025 included Memphis (up by 34%), Baltimore (27%), St. Louis (11%), Houston (10%) and Kansas City (8%).
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Homeowners in the Northeast and Midwest contend with the highest effective tax rates (average annual property taxes expressed as a percentage of the average estimated market value of homes in each area). Illinois had an effective rate of 1.84%, followed by New Jersey (1.58%), Vermont (1.4%), Connecticut (1.36%) and Ohio (1.32%).
Many of the states enjoying the lowest effective rates are in the West: Hawaii at 0.33%, followed by Idaho (0.39%), Wyoming (0.4%), Arizona (0.43%) and Alabama (0.43%).
Get the tax breaks you deserve
Make sure you take advantage of any relief programs that could reduce the total property tax you pay.
Many states offer a homestead exemption of some kind, shielding a portion of residents’ assessed home value from tax.
If you itemize on your tax return, you can deduct as much as $40,400 in state and local taxes for 2026, depending on your modified adjusted gross income (MAGI), thanks to a provision in the 2025 reconciliation bill, known as the “big beautiful bill.”
The deduction amount increases by 1% each year through 2029, after which it reverts to the pre-2025 SALT deduction cap of $10,000.
Review your assessment
When your locality sends you its assessment of your property’s value, gauge whether it’s accurate. (Note that your home’s assessed value may be some percentage of its full market value, depending on your tax assessor’s rules.)
You can review your property’s record card, typically available on the assessor’s website or by request, to make sure the details are in order. If it lists, say, a higher number of bedrooms than your home has or some other mistake, getting it corrected could reduce the assessed value and, in turn, your tax bill.
Also, pull up the record cards of comparable homes in your area to see how their assessments line up with that of your property. You can use sites such as Zillow or Realtor.com to search recent sale prices of nearby homes similar to yours, too. If you think your home’s assessment is too high, you can appeal it. Look for instructions on your assessment notice or your local government’s website.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
