What are Property Taxes on a Condo By State in 2024?
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Summary:
Property taxes on condos are generally similar to the taxes on single-family homes. However, the amount you’ll pay depends on your location and the value of your condo.
Buying a condominium (condo) can be an excellent choice for someone who wants to own their own home. Condo ownership comes with many of the benefits of owning a single-family home, including autonomy over your space and an asset that can increase in property value over time. The small square footage and lack of yard work can also be attractive perks.
That being said, condos still require ongoing maintenance and costs, including your annual property taxes. In this article, we’ll discuss how condos differ from other properties, the factors that affect your condo property taxes, condo property taxes by state, and more.
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What is a condo?
A condo — short of a condominium — is a private residence within a larger complex. Each condo interior is owned by an individual owner, while the exterior is owned and managed by the condo association.
One of the most distinctive characteristics of a condo is its ownership. In the case of an apartment, for example, a company or individual owns the entire building and rents out individual units. But in the case of a condo, each unit is privately owned.
You own the space within the walls of your condo unit, and the exteriors, and common areas, like a pool or elevator, are owned by a separate entity. -- Mark Washburn, a realtor with Naples Condo Boutique.Click to Tweet
How condos differ from other properties
As we’ve mentioned, the most important difference between a condo and an apartment is who owns the interior of the units. In the case of a condo, the individual owner is responsible for anything that might go wrong within the unit. Additionally, they pay homeowners’ association (HOA) fees to contribute to the upkeep of the condo building exterior.
A condo is also similar to a townhouse, which is a property type that’s attached to others and can be individually owned.
The key difference between these properties is that a townhouse owner is responsible for everything inside and outside of the unit. If you own a townhouse, you may have private yard space and are responsible for keeping up the outside area and the exterior of the property.
A townhouse can also have community space and homeowners’ association fees that cover the maintenance of that space. For example, a townhouse community might have a swimming pool or fitness center, which the HOA would manage.
Pro Tip
When deciding whether to purchase a condo, townhouse, or single-family home, consider the level of maintenance you want to be responsible for. Condos usually require the lowest maintenance, while single-family homes require the most maintenance.
Factors that affect the property taxes on a condo
Condos may differ from single-family homes and other properties in their ownership structure and construction, but owners generally pay real estate taxes at the same rate as single-family homeowners.
“We see a lot of condo sales in Southwest Florida, but most entities don’t tax condos or townhomes at rates higher than single-family homes,” Washburn said.
The most important factor that determines the property tax rate on a condo is the location. Property taxes are imposed at the state and local levels. Each government entity will set a property tax rate, which will be applied to all homes.
Generally speaking, the larger and more valuable the home, the higher the property taxes. As a result, as property values rise, so will property tax bills.
Property taxes can differ wildly from one location to the next. States, counties, and cities that choose to invest heavily in their communities are likely to have higher real estate taxes because these taxes can pay for:
- School districts
- Universities
- Public libraries
- Public safety
- Roads
- Infrastructure
- Sanitation
- Services
- Government spaces
Pro Tip
Generally, condos aren’t subject to different property tax rates than townhouses or single-family homes. However, condo owners often have lower tax bills because the amount of property owned by the resident is smaller.
Property taxes by state
As we mentioned, property taxes vary from one location to the next. It’s difficult to compare accurately since they’re levied at both the state and local levels. As a result, the property taxes rate you’ll pay in one part of a state is different from what you’d pay in another part of the same state.
According to the Tax Foundation, the people with the lowest tax bills in the U.S. live in Northwest Arctic Borough and the Kusivlak Census Area in Alaska; Avoyelles, East Carroll, and Madison, Louisiana; and Choctaw, Alabama. Homeowners in these locations have median property tax bills of less than $200 per year.
On the other hand, the highest property tax bills can be found in Bergen, Essex, and Union, New Jersey; Nassau, New York, Rockland, and Westchester, New York; and Falls Church, Virginia. Homeowners in these locations have median property tax bills of more than $10,000 per year.
The table below shows the ten states with the lowest property tax rates versus the states with the highest property tax rates.
| Lowest property tax states | Highest property tax states |
|---|---|
| Hawaii | New Jersey |
| Alabama | Illinois |
| Colorado | New Hampshire |
| Louisiana | Connecticut |
| District of Columbia | Vermont |
| South Carolina | Wisconsin |
| Delaware | Texas |
| West Virginia | Nebraska |
| Nevada | New York |
| Wyoming | Rhode Island |
Property tax vs. home value
It’s worth remembering, of course, that the property tax rate is just one piece of the puzzle. It’s possible that a condo owner in a state with a low property tax rate but high home values will pay more than someone in a state with higher property taxes but lower home values.
For example, according to WalletHub’s 2022 property tax data, someone in Hawaii — the lowest property tax state — will pay an average property tax bill of $1,715. Meanwhile, someone in Missouri — a state with the 27th lowest property tax rate — will pay an average of $1,526. This is because the home values in Missouri are considerably lower than those in Hawaii.
Pro Tip
Some condo owners will pay property taxes directly to the taxing government entity, while others will pay it along with their monthly mortgage payment. If sent with a mortgage payment, the money goes into an escrow account until taxes are due.
Property tax exemptions for condos
Some states offer property tax exemptions to help them lower their tax bills. Here are a few that may apply to condo owners:
- Homestead exemptions help homeowners to safeguard a portion of their primary residence’s property value from taxation. Some states offer a homestead exemption directly on the property tax bill, while others offer an income tax credit.
- Senior citizen exemptions are available to homeowners of a certain age. Some of these exemptions are permanent, while others require the exempted payments to be repaid when the property is sold.
- Disability exemptions apply to individuals with disabilities. These exemptions can help pay for home renovations to assist with mobility in the home.
- Veteran exemptions help current and former military members save money on their tax bills, either in part or in full.
- Income exemptions are available to homeowners below a certain income.
Keep in mind that none of these exemptions are available in all states. To determine which exemptions are available in your state, consider contacting your state’s taxation entity, such as a department of revenue. You can also use tax preparation software, some of which are below, to help you determine your property tax obligations as well as other tax liabilities.
FAQs
Do I have to pay local property taxes?
Every homeowner in the U.S. pays property taxes unless they qualify for an exemption. Taxes on real estate are determined by local governments, including cities, counties, and school districts. Some areas charge rates that are higher than others.
How often is property tax paid?
Most government entities require that you pay your property taxes annually, but some collect them biannually or quarterly.
How much are the taxes on a condo?
The property tax rate you’ll pay on a condo depends on the condo’s property value and where it’s located. Effective property tax rates range from 0.28% in Hawaii to 2.49% in New Jersey.
Who is exempt from paying property tax?
Some property owners may be eligible for property tax exemptions. Most of these exemptions are for organizations such as religious groups and government bodies. However, some states also offer exemptions for individual homeowners.
Key Takeaways
- A condo is a type of property where the interior of the unit is owned by an individual, while the rest of the complex and the exterior are jointly owned by the condo community.
- While condos differ from other properties in many ways, they are subject to the same property tax rates as other properties.
- Your property tax rate will depend on where you live since local governments levy these taxes.
- Property taxes are lowest in Hawaii, Alabama, and Colorado, and highest in New Jersey, Illinois, and New Hampshire.
- Depending on where you live, you may be able to reduce your property tax bill with certain tax exemptions.
EG
Erin Gobler is a Wisconsin-based personal finance writer with experience writing about mortgages, investing, taxes, personal loans, and insurance. Her work has been published in major outlets, such as SuperMoney, Fox Business, and Time.com.
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