A Comparison between Residential & Commercial Rates across the United States

The property taxes are not the journalist’s only favorite topics, in part as the issue is complex and mostly involves the analysis of budgets and crunching numerical. But this is the only subject of widespread interest, especially if the local officials consider raising or lower the property taxes. Nearly everyone gets affected, whether they be homeowners or the business owners who pay tax. The government officials who decide how the money will be used or the residents who benefit from the government services the tax go for the fund. 

The report’s key findings say: 

  • The urban and rural areas show average effective property tax rate in the United States fairly as the consistent for homes valued at $150,000 and $300,000. It typically varies from 1.345% on the less expensive homes of the rural areas to 1.554% on the more expensive homes of the urban areas. But there also stands a significant variation among the regions of same country – the highest urban rates are found in New England and the Midwest whereas the South tend to have lower rates. In the rural areas, the highest rates are found in New England, Midwest and Mid-Atlantic. 
  • The property taxes differ substantially across the United States. The Bridgeport, Conn., had more residential property-tax burden whereas Boston and Honolulu have smallest among all the cities included in the analysis. 
  • Cities having highest effective commercial property tax rates were stated as New York, Detroit, Providence, Chicago and Des Moines. The property taxes on the commercial structure were valued at $1 million in Detroit that had been the highest tax burden all over the urban cities that was $50,574. 
  • The lowest effective commercial property tax rates in all the urban cities were in Del., Wilmington, Seattle, Virginia Beach, Cheyenne, Wyo. and Honolulu. The property taxes here on the commercial structure were valued at $1 million in Cheyenne which was considered as the lowest tax burden being valued as $8309. 
  • The tax rates on the business property are even higher in the United States. If calculated, the business property tax rate in New York City and Boston were higher at least four times higher than the ones for homes. 

The reports show extensive details regarding the property taxes across the country and also the authors found it important to give this data context. Some of the areas were more reliant on the property taxes than the others. Also, the residents and business owners paid taxes and fees were drastically different from place to place. Some of the locations showed relatively high property tax levies as the governments there were more dependent on the own source revenue or had limited non-property tac on the other options available to them. 

Other states had higher income and sales taxes in part to finance the great share of cost of local government. If we talk further, one more complicating issue is the substantial variation in the home values for different states and cities. The owners of two physical identical homes in two different cities may be charged differently for both the property taxes of even if same property-tax rate is applied. 

Considering other angles of studies, the journalists brought out a few of the studies on the property taxes: 

Property tax limitations effect on local finances

Combining the estimates across the studies provide a better evidence that local governments are not able to avoid the limitations on the property tax increases. Property tax limitations reduce the revenues from property taxes. It may lead to compensatory increase in the other taxes, but the average of such increase may not fully makeup for the foregone property tax revenue. Also, the net impact of the property tax limitation is considerable fiscal constraint in the local public sector. If they reduce the taxation wealth and spend on the locally provided services, the property tax limitation may face a variety of perverse consequences for the social life. 

Effect of administrative pay and local property taxes over student achievement scores

However, the results of the hypothesis that involved administrative costs were mixed. The administrative spending and administrative salaries were found to be positively related to testing the performance in one-way time fixed effects model but not in the two-way models. Lastly, the student faculty and classroom ratio were found to be positive and also significant in a few of the tests, although not robust to alternative specifications. 


Josh Welch and his team brought you this article to make you aware of the comparison of the residential and commercial rates across the state of United States. They are working to make people aware of the higher tax rates and are not opposing the tax structures. 

Josh Welch is the founder of the Americans for Growth Coalition. He runs a real estate firm that has almost $200M assets. He is a successful business owner creating hundreds of jobs. Also, he is adamantly fighting for the issues he cares about. For more details about the Americans for Growth Coalition please click here.