California Property Tax Rates 17th Lowest in the Nation

Do you know someone who moved out of California in search of lower taxes? Most of us do. So it may come as a surprise that Californians pay the 17th lowest property tax rates in the nation, according to an analysis released this week by WalletHub.

How did they come up with their numbers? Methodology: the “median real-estate tax payment” was divided by the “median home price” in each state. The resulting rates were used to obtain the dollar amount paid as real-estate tax on a house worth $175,700, the median value for a home in the U.S., according to the U.S. Census Bureau.

While our rate here in California is low compared to most other states, John C. Banko, Senior Lecturer of Finance at the Warrington College of Business Administration at the University of Florida, is critical of California’s taxes because they are based on purchase price, but ratchet up when improvements are made. He claims this system “disincentivize individuals from updating property. You do XX to your house, the appraiser will be there. That strikes me as problematic. California is the worst….Neighborhoods start to have fabulous homes right next to run-downs, entirely because of the design of the tax.”

Here’s a look at real estate tax rankings from WalletHub:

1 Hawaii 0.28%

2 Alabama 0.43%

3 Louisiana0.48%

4 Delaware 0.53%

T-5 District of Columbia 0.57%

T-5 South Carolina 0.57%

7 West Virginia 0.59%

T-8 Arkansas 0.62%

T-8 Colorado 0.62%

T-8 Wyoming 0.62%

11 Utah 0.69%

12 New Mexico 0.72%

13 Tennessee 0.75%

14 Idaho 0.77%

15 Mississippi 0.78%

16 Virginia 0.80%

17 California 0.81%

T-18 Kentucky 0.84%

T-18 Arizona 0.84%

20 North Carolina 0.85%

T-21 Oklahoma 0.87%

T-21 Montana 0.87%

23 Indiana 0.88%

24 Nevada 0.92%

25 Georgia 0.96%

26 Missouri 1,00%

T-27 Oregon 1.08%

T-27 Washington 1.08%

T-27 Maryland 1.08%

30 Florida 1.10%

31. Massachusetts 1.18%

32. Minnesota 1.19%

33. Alaska 1.21%

34 North Dakota 1.22%

35 Maine 1.27%

36 South Dakota 1.36%

37 Kansas 1.41%

38 Iowa 1.47%

39 Pennsylvania 1.51%

40 Ohio 1.55%

41 New York 1.58%

42 Rhode Island 1.61%

43 Vermont 1.72%

44 Michigan 1.83%

45 Nebraska 1.88%

46. Connecticut 1.91%

47 Texas 1.93%

48 Wisconsin 1.97%

49 New Hampshire 2.10%

50 Illinois 2.25%

51 New Jersey 2.29%