Why Owner-Occupied Homes Have Higher Taxes

Blomquist: “The markets attractive to real estate investors over the past five years of the current real estate recovery have largely been focused in the West and Southeast, which also happen to have the lowest property-tax rates in the nation.”

IRVINE, CA—Certain factors are causing the effective tax rate to be higher on owner-occupied residential properties than on investment properties, ATTOM Data Solutions’ SVP Daren Blomquist tells GlobeSt.com. According to a recent report from the firm that analyzed 2016 property taxes for more than 84 million US single family homes, owner-occupied properties register higher effective tax rate than investment properties.

The report revealed that average annual property tax for owner-occupied single-family homes nationwide was $3,658, an effective tax rate of 1.21%. That was higher than the average annual property tax of $2,437 and effective tax rate of 1.03% on non-owner occupied (investment) homes. The effective tax rate for investment homes was lower than the effective tax rate for owner-occupied homes in 34 states, including California, Texas, Ohio, Illinois and New York.