Short answer: Roughly the assessed value times the local tax rate. Census ACS 2024 puts the US median at $3,211 a year on a $360,600 median home, about 0.89% of value. Among the 50 largest rental markets it runs from about 0.40% (Colorado Springs, CO) to 1.75% (El Paso, TX). Those figures are for owner-occupied homes; a rental can pay more if it loses a homestead exemption or is reassessed after the sale, so check the county assessor.
Definition
Effective property tax rate is the yearly property tax bill divided by the home's market value. A $2,000 bill on a $200,000 home is a 1.00% effective rate; it rolls the local tax rate, assessment level and exemptions into one comparable number.
By the numbers: Census ACS 2024: owner-occupied US homes paid a median $3,211 in real estate taxes on a median value of $360,600, about 0.89%. Across the 50 largest rental markets the ratio runs from 0.40% in Colorado Springs, CO to 1.75% in El Paso, TX. See all 50 markets.
How property tax works on a rental
Your local government bills property tax on the home, and many owners pay it through their mortgage escrow account. The basic math works the same way in most places:
Property tax = assessed value × local tax rateThe assessed value is set by the local assessor and may be a fraction of market value, depending on where you live. The rate is usually several layers added together, such as county, city and school district, and is sometimes quoted in mills (dollars per $1,000 of assessed value). Exemptions then subtract from the assessed value or the bill.
Because assessment rules and rates vary so much, the easiest way to compare places is the effective rate: the yearly bill divided by the home's market value.
Effective rate = yearly tax bill ÷ market valueGood to know: A $2,000 bill on a $200,000 home is a 1.00% effective rate. Census ACS 2024 puts the US at about 0.89% ($3,211 median tax on a $360,600 median home value).
Why the seller's bill can understate yours
The number on the listing is the seller's tax bill, and two things can make yours higher:
1. Reassessment after a sale. In many places a sale can trigger a reassessment, or the next routine reassessment will reflect what you paid. If the seller owned the home for years, their assessed value may be well below today's price. The rules differ by state and county, so check the county assessor's website or call their office before you make an offer.
2. Lost owner-occupant exemptions. Homestead exemptions and similar breaks are generally meant for a home you live in, so they often do not apply to a non-owner-occupied rental. If the seller lived there and had one, it can drop off once the home becomes a rental. Other personal exemptions the seller had, such as senior or veteran exemptions, may not transfer to you either. The county assessor is the source of truth.
Red flag: Underwriting with the seller's current tax bill. Estimate your own bill instead: your purchase price × the local effective rate, or ask the assessor what the home would be assessed at after a sale with no exemptions.
Tip: Look for the property on the county assessor or treasurer site. Most show the assessed value, the current exemptions and the last few years of bills. An exemption line on a property you plan to rent is a sign the bill will go up.
Property tax rates in the 50 biggest rental markets
Here is the median real estate tax paid, the median home value, and the ratio between them for the 50 US cities with the most renter households, from the Census Bureau's 2024 American Community Survey (tables B25103 and B25077). They are sorted from the lowest effective rate to the highest. 23 of the 50 are above the US figure of 0.89%. Click a city for its full market page.
| City (lowest rate first) | Median home value | Median tax paid / yr | Effective rate |
|---|---|---|---|
| Colorado Springs, CO | $479,500 | $1,906 | 0.40% |
| Phoenix, AZ | $454,900 | $1,816 | 0.40% |
| Denver, CO | $636,400 | $3,071 | 0.48% |
| Las Vegas, NV | $458,300 | $2,229 | 0.49% |
| Nashville, TN | $438,800 | $2,471 | 0.56% |
| Tucson, AZ | $299,700 | $1,774 | 0.59% |
| Boston, MA | $722,800 | $4,447 | 0.62% |
| San Diego, CA | $980,700 | $6,111 | 0.62% |
| Washington, DC | $733,400 | $4,594 | 0.63% |
| Los Angeles, CA | $947,900 | $6,146 | 0.65% |
| Long Beach, CA | $849,500 | $5,721 | 0.67% |
| Charlotte, NC | $431,900 | $2,975 | 0.69% |
| Raleigh, NC | $450,300 | $3,245 | 0.72% |
| Fresno, CA | $396,300 | $2,895 | 0.73% |
| San Jose, CA | $1,271,200 | $9,495 | 0.75% |
| Sacramento, CA | $515,800 | $3,898 | 0.76% |
| San Francisco, CA | $1,314,700 | $10,000+* | 0.76% |
| Jacksonville, FL | $325,300 | $2,497 | 0.77% |
| Seattle, WA | $950,800 | $7,503 | 0.79% |
| Orlando, FL | $430,200 | $3,423 | 0.80% |
| Tampa, FL | $494,400 | $4,031 | 0.82% |
| Philadelphia, PA | $253,600 | $2,100 | 0.83% |
| Louisville, KY | $241,700 | $2,043 | 0.85% |
| Albuquerque, NM | $324,600 | $2,771 | 0.85% |
| Miami, FL | $598,200 | $5,120 | 0.86% |
| New York, NY | $778,600 | $6,669 | 0.86% |
| Tulsa, OK | $234,400 | $2,082 | 0.89% |
| Memphis, TN | $209,800 | $1,947 | 0.93% |
| Indianapolis, IN | $241,500 | $2,248 | 0.93% |
| Oklahoma City, OK | $259,300 | $2,475 | 0.95% |
| Oakland, CA | $884,000 | $8,696 | 0.98% |
| Portland, OR | $588,200 | $5,925 | 1.01% |
| Atlanta, GA | $462,200 | $4,663 | 1.01% |
| Kansas City, MO | $261,600 | $2,795 | 1.07% |
| Minneapolis, MN | $368,300 | $4,471 | 1.21% |
| Columbus, OH | $279,900 | $3,559 | 1.27% |
| Austin, TX | $571,000 | $7,468 | 1.31% |
| Baltimore, MD | $247,400 | $3,468 | 1.40% |
| Cincinnati, OH | $263,300 | $3,748 | 1.42% |
| Houston, TX | $301,200 | $4,308 | 1.43% |
| Dallas, TX | $340,400 | $4,943 | 1.45% |
| Detroit, MI | $95,900 | $1,415 | 1.48% |
| Chicago, IL | $341,200 | $5,152 | 1.51% |
| Fort Worth, TX | $330,500 | $5,050 | 1.53% |
| San Antonio, TX | $260,900 | $4,026 | 1.54% |
| Cleveland, OH | $109,600 | $1,695 | 1.55% |
| Jersey City, NJ | $571,700 | $9,126 | 1.60% |
| Omaha, NE | $269,500 | $4,464 | 1.66% |
| Milwaukee, WI | $207,900 | $3,605 | 1.73% |
| El Paso, TX | $209,600 | $3,677 | 1.75% |
| United States | $360,600 | $3,211 | 0.89% |
The range is wide: from about 0.40% in Colorado Springs, CO ($1,906 on $479,500) to 1.75% in El Paso, TX ($3,677 on $209,600). A cheaper city does not always mean a smaller bill: in Milwaukee, WI and El Paso, TX, the median home is worth less than the US median ($360,600) but pays more tax than the US median ($3,211).
Good to know: These are approximations. B25103 measures real estate taxes paid by owner-occupied homes, so it reflects owners' exemptions and long-held assessments, and a rental can pay more. Each figure is a city median, and the median tax ÷ the median value is not the same as the median of every home's own rate. ACS reports taxes above $10,000 only as "$10,000+" (marked *: San Francisco, CA), so those rates use $10,000 and are a floor, the same way FirstDoor's market pages handle it.
How taxes hit cash flow
Property tax is a fixed monthly cost in your operating expenses, so it lowers cash flow, cash-on-cash and DSCR together. Same $200,000 house at $2,000/mo, 20% down at 7.40% (Freddie Mac average, October 15, 2026), with the effective tax rate of the lowest-rate city, the US and the highest-rate city in the table:
| Tax rate | Tax | Cash flow / mo | Cash-on-cash | DSCR |
|---|---|---|---|---|
| Low: Colorado Springs, CO (0.40%) | $795/yr · $66/mo | $366 | 9.5% | 1.33 |
| US (0.89%) | $1,781/yr · $148/mo | $284 | 7.4% | 1.26 |
| High: El Paso, TX (1.75%) | $3,509/yr · $292/mo | $140 | 3.6% | 1.13 |
Moving the same house from a 0.40% city to a 1.75% city adds about $226/mo of tax. That takes cash flow from $366 to $140 a month and cash-on-cash from 9.5% to 3.6%. Click a scenario to open it in the calculator.
Tip: Tax bills can rise after a reassessment or a rate change. Stress-test a higher bill in the rental cash-flow calculator, and pair it with a realistic vacancy rate. The 50% rule is a quick screen, but it hides taxes inside one number: at El Paso, TX's rate, tax alone is 15% of rent on this house, versus 3% at Colorado Springs, CO's.
Property taxes are deductible on Schedule E
Taxes are one of the common rental expenses listed in IRS Publication 527, and rental income and expenses for a typical rental house or apartment are normally reported on Schedule E (Form 1040), Part I. Pub 527 also covers a few closing-day details:
| Situation (Pub 527) | Treatment |
|---|---|
| Yearly real estate taxes on the rental | Rental expense on Schedule E |
| At purchase, you pay taxes the seller owed and the seller doesn't reimburse you | Added to your basis, not deducted |
| At purchase, you reimburse the seller for taxes they paid for you | Usually deductible, not added to basis |
| Local benefit charges that raise the property's value (new streets, sidewalks, water or sewer systems) | Added to basis, not deducted |
| Local benefit taxes for maintaining or repairing those systems, or interest on them | Deductible |
If you rent out part of a home you live in, Pub 527 says to split expenses such as real estate taxes between the rental part (Schedule E) and the personal part.
Good to know: A deduction lowers your income tax; it doesn't lower the bill you pay the county. FirstDoor's cash flow and returns are pre-tax. For the other big rental deduction, see rental property depreciation, and check your own situation with a tax pro.
Next: look up your city on the 50 rental markets page, then score a real listing with your own tax estimate in the cash-flow calculator.
Worked example
A $200,000 single-family rental at $2,000/mo, 20% down at 7.40% for 30 years (Freddie Mac average, October 15, 2026), property tax at the US effective rate of 0.89% ($1,781/yr, Census ACS 2024), $1,200/yr insurance, 5% vacancy, 5% maintenance, 8% management, $6,000 closing costs.
| Property tax, US rate (/mo) | −$148 |
| Property tax, Colorado Springs, CO rate (/mo) | −$66 |
| Property tax, El Paso, TX rate (/mo) | −$292 |
| Mortgage (P&I) | −$1,108 |
Frequently asked questions
How much are property taxes on a rental property?
Roughly the assessed value times the local tax rate. Census ACS 2024 puts the US median at $3,211 a year on a $360,600 median home, about 0.89% of value. Among the 50 largest rental markets it runs from about 0.40% (Colorado Springs, CO) to 1.75% (El Paso, TX). Those figures are for owner-occupied homes; a rental can pay more if it loses a homestead exemption or is reassessed after the sale, so check the county assessor.
Are property taxes deductible on a rental property?
Yes. IRS Publication 527 lists taxes among common rental expenses, reported on Schedule E (Form 1040). Back taxes you pay for the seller without reimbursement are added to your basis instead, and charges for local improvements like new sidewalks or sewers are added to basis rather than deducted.
Do property taxes go up when you buy a rental?
They can. In many places a sale can lead to a reassessment closer to the price you paid, and owner-occupant exemptions such as a homestead exemption often do not apply to a rental. Rules vary by state and county, so check the county assessor and estimate your bill from your price, not the seller's bill.
Which big cities have the highest property tax rates for landlords?
Using Census ACS 2024 medians (tax paid ÷ home value), the highest effective rates among the 50 largest rental markets are El Paso, TX (1.75%), Milwaukee, WI (1.73%) and Omaha, NE (1.66%). The lowest are Colorado Springs, CO (0.40%), Phoenix, AZ (0.40%) and Denver, CO (0.48%).
How does FirstDoor estimate property tax?
On market pages, FirstDoor multiplies the price by the city's median tax paid ÷ median home value from Census ACS (the effective rate in the table above). In the calculator, you enter the yearly tax yourself, so use the county's estimate for your purchase price when you can.
Keep learning
Sources
Educational content, not financial advice. Loan programs and requirements change; confirm with a lender.