The Property Tax Slowdown: More Counties Cross the $10,000 Threshold

The steady climb in U.S. property tax burdens has hit a speed bump. According to a 2024 report by real estate data firm ATTOM, the median annual property tax increase slowed to 2.7% in 2023—down from 4.1% in 2022—aligning with a nationwide inflation rate of 2.9%. Yet, this deceleration has not halted the steady expansion of counties where median property taxes now exceed $10,000 annually. This divergence highlights a growing divide between regions where housing wealth fuels robust local budgets and those struggling with affordability.

The Slowing Tax Rate Increase: A Nationwide Trend, But Not Uniform

The 2.7% increase in property tax rates marks the first sub-3% rise since 2019, driven by several factors:
- Inflation Moderation: As headline inflation cooled, local governments faced less pressure to hike tax rates aggressively.
- Policy Adjustments: States like Georgia (Amendment 1) and Louisiana reduced reliance on property taxes by trimming corporate and income taxes, easing fiscal pressure.
- Assessment Lag: In many areas, property valuations are updated less frequently than market prices, delaying tax hikes.

However, this slowdown has not dampened the upward trajectory in high-cost regions.

The Rise of $10k Counties: Where the Burden Is Heaviest

Despite the slowdown, the number of counties where median property taxes surpass $10,000 has grown steadily. Key examples include:
- New Jersey: Eight counties, including Bergen, Essex, and Somerset, now have median taxes exceeding $10,000. New Jersey’s effective tax rate of 2.23% (2023) remains the highest nationally.
- New York: Six counties near New York City, such as Nassau and Westchester, and Manhattan itself, report median bills exceeding $10,000.
- Virginia: Falls Church City, a county-equivalent near Washington, D.C., also tops this threshold.

Meanwhile, Marin County, California, and San Francisco County edge closer, with median taxes nearing $10,000. These regions are characterized by high home values, strong local services (e.g., schools, infrastructure), and reliance on property taxes to fund them.

Geographic Disparities: A Tale of Two Tax Systems

The divide between high- and low-tax regions is stark. States like Hawaii (0.27% effective rate) and Alabama (0.38%) impose minimal burdens, while New Jersey and New York dominate the top. This reflects:
- Urbanization: High-tax counties are clustered near major cities, where land scarcity and demand for amenities push home values—and tax bills—skyward.
- Local Governance: Counties with strong public services (e.g., schools, transit) often levy higher taxes to fund them.

The contrast is stark: in New York County (Manhattan), median property taxes are two to three times the state average, while in Alabama’s Choctaw County, homeowners pay under $250 annually.

Implications for Investors

1. Real Estate Markets:
2. High-tax areas: While home values in places like New Jersey and New York remain robust, the $10,000+ tax threshold could deter first-time buyers and slow turnover.

3. Low-tax regions: States like Texas and Colorado—where property taxes are capped or capped at low rates—may see increased demand as buyers seek affordability.

4. REITs and Infrastructure:

6. Local governments in high-tax areas are more likely to fund infrastructure upgrades, benefiting construction firms. However, rising taxes may reduce disposable income for home improvement spending.

7. Policy Risks:

8. States like Maryland froze property tax rates in 2025, but rising assessments mean bills still climb. Investors must monitor policy changes, such as New Jersey’s 2024 voter-approved tax measures for behavioral health funding.

Conclusion: A Balancing Act for Homeowners and Investors

The slowdown in property tax growth offers brief respite, but the $10,000 threshold is now a reality for over a dozen counties, with more likely to follow. Investors should:
- Prioritize affordability: Regions with low tax rates and rising home values (e.g., Texas, Colorado) may offer better returns.
- Beware of overvaluation: High-tax areas like Manhattan or San Francisco could face liquidity risks if demand wanes.
- Watch for policy shifts: Caps on assessments (e.g., Georgia’s Amendment 1) or exemptions (e.g., for seniors) could reshape local economies.

The data underscores a clear truth: property taxes are both a financial anchor and a wealth amplifier. For now, the trend toward higher thresholds is unlikely to reverse, leaving homeowners and investors to navigate a landscape where location and local policy increasingly dictate fiscal fate.

Data sources: ATTOM Data Solutions, U.S. Census Bureau, state tax commissions.