Report ranks Oklahoma in middle for property tax rates

An individual who owns a house in Oklahoma with the median (2021) state worth of $150,800 ought to count on to pay annual property taxes of $1,351 – making the efficient actual property tax charge in the state 0.90%. By comparability, the typical American family spends $2,690 on actual property property taxes, in keeping with a report ready by WalletHub based mostly on a evaluate of U.S. Census Bureau knowledge. (Photo by Patrick Schreiber on Unsplash)

Oklahoma got here out No. 25 in a current rating of states relating to property tax rates.

Each 12 months, the typical American family spends $2,690 on actual property property taxes, in keeping with a report ready by WalletHub based mostly on a evaluate of U.S. Census Bureau knowledge.

Not so in Oklahoma, the place the typical proprietor’s property taxes are considerably decrease.

According to the non-public finance web site’s report, an individual who owns a house in Oklahoma with the median (2021) state worth of $150,800 ought to count on to pay annual property taxes of $1,351 – making the efficient actual property tax charge in the state 0.90%.

By comparability, individuals in New Jersey, the state ranked worst for property taxes, would pay $8,797 in taxes on a house priced on the state’s 2021 median worth of $355,700. That comes out to an efficient charge in the Garden State of two.47%.

In Hawaii, the state ranked on the prime of the heap relating to the way in which it assesses property taxes, an individual would count on to pay $1,893 on a house priced on the state’s median 2021 worth of $662,100 – making for an efficient tax charge of simply 0.29%

In one other method of evaluating property taxes, individuals in Oklahoma would count on to pay $2,194 on a house valued at $244,900, which was the median dwelling worth throughout the United States as of 2021. People in New Jersey would count on to pay $6,057 in taxes on the identical worth dwelling, whereas individuals in Hawaii would count on to pay $700.

Depending on the place an individual lives, property taxes can vary from being extra of an inconvenience to a significant monetary burden, WalletHub stated, noting that the National Tax Lien Association has reported that greater than $14 billion in property taxes don’t receives a commission yearly.

“People should consider property taxes when deciding to move because property taxes vary widely across the U.S. and it is a very significant expense annually,” stated Greg Geisler, a professor of accounting in the Kelley School of Business at Indiana University, who contributed to the report.

The report concluded that purple states that lean towards conservative Republican politics typically impose decrease property taxes on residents than blue states that lean Democrat.

However, it shouldn’t be concluded that decrease property tax rates don’t essentially equate to decrease total tax payments paid by residents. Hawaii, a blue state, could have decrease property taxes, however individuals there pay extra in increased state revenue taxes and in a common excise tax, which raises the state’s total tax burden.

Doron Narotzki, an affiliate professor in the College of Business on the University of Akron, who additionally contributed to the report, stated it’s essential for states, counties, and municipalities to attempt to come to a good steadiness relating to tax collections.

“Property taxes are often seen very positively by tax scholars because they are considered to be efficient, and reliable and are based on equity, and because property taxes are often used to generate revenue for local governments so they can provide schools, roads, and (police and fire) protection,” he stated, noting that property taxes generate about 75% of native taxes and half of native authorities income. “I believe that for sound tax policy, we should keep the current situation as is. Local governments need reliable and efficient taxes in order to be able (to) have long-term plans.”

Another contributor, Alex Combs, a professor in the Department of Public Administration and Policy on the University of Georgia, stated governments ought to contemplate a number of elements earlier than deciding on an optimum mixture of taxes, together with income stability, income capability, and fairness.

“The property tax is a relatively stable source of revenue, which can help maintain important services during economic downturns,” he stated. “However, heavy reliance on property taxes can make living in an area unaffordable when property values increase significantly, especially for those with lower incomes. Local governments have increased their reliance on more volatile forms of taxation, particularly sales and income taxes. These taxes shift some of the burdens to a broader base of taxpayers in the community or export some of the burdens to non-residents who commute there to shop or work. Regarding equity, any of these taxes can be made less regressive or progressive through exemptions or differential tax rates. Such design choices must be considered alongside the amount of revenue generated and the cost of providing essential services.”