Rising property taxes are a housing market killer
foxbusiness.comNational Association of Home Builders CEO Jim Tobin explains how local governments have tied up housing construction projects.
Americans are pouring out of cities with high property taxes and relocating to places like Tennessee in search of lower rates as they try to reduce hidden costs of homeownership.
That's according to a new analysis published by Laffer Associates and the Committee to Unleash Prosperity, which found that a growing number of people are leaving Ohio, Illinois and western Pennsylvania in favor of states like Tennessee, where the average property tax rate is just 0.6%.
During the seven-year period from 2013 to 2020, the population in the Cleveland area tumbled by 1.2% and in Chicago by 0.8%.
In Pittsburgh, the population barely increased, rising just 0.8%. By comparison, Nashville grew 7.3% during that same time period. (Tennessee also does not impose a state income tax, unlike Pennsylvania, Ohio and Illinois).
HOUSING STARTS RISE MORE THAN EXPECTED IN JULY DESPITE HIGH MORTGAGE RATES
Homes in Rocklin, Calif., Dec. 6, 2022. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
Cleveland, Pittsburgh and Chicago have some of the highest property taxes in the country, with effective rates of 1.7%, 1.9% and 1.4%, respectively, according to a March report from Construction Coverage, a California-based company that researches construction software and insurance.
«If the level of taxation of the classic Cleveland suburbs applied across the country, the average American homeowner, and indirectly the average renter as well, would be shelling out a thousand dollars a month in property taxes,» the Laffer Associates study said. «Not in mortgage interest, insurance and property taxes, but in property
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