Connecticut had the third highest effective property tax rates in the nation for single family homes, trailing only New Jersey and Illinois in an annual analysis released by ATTOM, which analyzes real estate data.
Noting that property taxes had risen 3.6 percent across the board nationwide in 2022, but that the effective tax rates – property taxes compared to the value of the home – experienced a much smaller increase due to rapidly rising home values.
“Property taxes continued their never-ending climb last year, with wide disparities continuing from one area of the country to another, connected to varying costs, services, and tax base,” said Rob Barber, CEO of ATTOM. “This year, local governments and school systems will face even greater challenges keeping taxes in check, given rising inflation rates and a growing number of commercial properties that could be eligible for tax reductions after suffering a surge of vacancies during the pandemic.”
Connecticut had a total effective tax rate of 1.57 percent for single-family homes, putting it far ahead of neighbors like New York, which had an effective tax rate of 1.26 percent. The Hartford Metro area also had the sixth highest effective rate for metro areas with 1.85 percent, higher than Chicago and New York City, according to ATTOM.
Connecticut, although having the highest effective tax rate in the Northeast, was not alone in having high property taxes. The Northeast in general was higher than the rest of the country, with average property taxes for Connecticut being $7,671, ahead of Massachusetts, New Hampshire and New York, and second only to New Jersey.
“Huge gaps in average tax bills around the U.S. remain in place,” Barber said. “Those disparities are heavily connected to differences in local government and school services, public employee wages, economies of scale between large and smaller towns and the amount of commercial properties that help shoulder the local tax burden.”
ATTOM is not the only organization to highlight Connecticut’s high property taxes. Organizations like the Tax Foundation and Rocket Mortgage have made similar findings, and the tax burden placed on property owners, including vehicle owners, has continually been an issue at Connecticut’s Capitol.
Connecticut lawmakers increased the property credit from $200 to $300 in 2022 and during a period of exceptionally high inflation, particularly for used cars, the legislature lowered the cap on municipal vehicle tax mill rates from 45 mills to 32.46 mills.
Municipal organizations like the Connecticut Conference of Municipalities and the Council of Small Towns have pushed for fewer “unfunded mandates” on Connecticut towns, saying they ultimately increase the tax burden on homeowners, and have pushed for allowing municipalities to levy other taxes, like a local sales tax, to make cities and towns less reliant on property taxes.
ATTOM warned that the effective property tax rates could increase this year “amid mortgage rates that have doubled, high consumer price inflation and other forces that have cut into what home seekers can afford.”
Connecticut home prices increased by 8.5 percent over the last year, according to Zillow, with the typical single family home value was $371,059 as of March 2023. Connecticut’s real estate prices saw a sharp increase during the pandemic as people fled New York for less congested areas in Connecticut, driving up home sale prices.
According to Zillow, the typical single family home price in Connecticut was $277,466 in March of 2020.
Aside of rising interest rates set by the Federal Reserve to tamp down inflation, the rapidly rising price of real estate in Connecticut has led to a push to create more housing through zoning changes and incentive programs to help first time home buyers enter the market.
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