Property Tax

Real Estate

Property tax is an annual tax levied by local governments (counties, cities, school districts) based on assessed property value. US property taxes average about 1% of property value but vary widely: New Jersey 2.5%, Texas 1.8%, California 0.8% (Prop 13 limits), Hawaii 0.3%. Funds local services: schools, police, fire, infrastructure. Typically escrowed with mortgage payment for monthly budgeting. SALT deduction (state and local taxes including property) is federally capped at $10,000 per year — significant constraint for high-tax states. Tax assessments lag market values; can be appealed if assessment exceeds comparable market values. Property taxes increase even when market prices fall (often).