The California average real estate tax of rate of $1,431 is good news for home owners and buyers this year. The state came in 17th in a nationwide ratings report of property taxes for 2015. WalletHub, a finance website issued a report that Hawaii had the lowest property taxes averaging $482 where New Jersey was the highest at $3,971.
This is cause for celebration as the typical working person is still hit hard with state income tax. California is high on the list for being one of the most expensive states for personal and sales tax. But let’s focus on the positive, any tax break in the state is eagerly met with open arms. The financial report was made by dividing the median tax by the estimated valuation price of the home.
In several ways proposition 13 has a lot to do with keeping some of our real estate taxes down. The mandated bill levels the assessed property valuation capping the rate at 1% at the time of the home sale. Further, it prevents tax rates from exceeding a maximum of 2% per year unless the home is resold or a major rehab repair is required.
Coming in at number 17 at least gives a small break to new and first time homebuyers in California trying to cope with monthly mortgage payments along with rising living expenses like food and gas. Property taxes are among the many costs in the home buyer checklist outside of the mortgage loan. If you are a new or first time home buyer, talk to your realtor or agent about the anticipated property tax on a new sale.
Sure there are plenty of other costs in the California real estate transaction that may cost more than other states. However, knowing our real estate taxes are cheaper than New Jersey and we get the weather, sun, sand, surf makes for a pretty good day at the beach!