Real Estate Investing & asset Tax Rates
In the United States, asset tax is assessed by local government at the municipal or county level. The asset tax estimation is based on two values--the value of the land, and the value of the building. Since asset tax is calculated at a local-level--and since changes occur frequently--it's tricky to decree the exact spots where asset tax is the lowest. However, the following facts should help you find areas with high appreciation And low asset taxes.
Which States Have the lowest asset Tax Rates?
County tax rates are often averaged into a single figure, and this number is used when comparing asset taxes in the middle of states. Surprisingly, Wyoming has the lowest asset tax rates. Unfortunately, asset values in Wyoming tend to be pretty depressed, due to low people influx and a lack of jobs. Also, Wyoming does not rank very when it comes to appreciation rates for residential and commercial real estate. Just because an area has low asset taxes does not mean it will be the best area to spend in (or relocate to).
What to Look For When Investing
Look for an area that has a consistent rate of real estate appreciation, combined with fairly low asset taxes. Often, local asset tax rates are low because real estate appreciation in the area is low--so you need to be careful. Cities placed next to universities and areas where businesses are relocating are usually exquisite spots to buy real estate. Paying concentration to people increase can help you spot real estate trends and make wiser investments.
Medium-Sized Cities With the lowest asset Tax Rates
According to data gathered by the Office of the Cfo in Washington, D.C., the following cities have the lowest asset tax rates in 2006, based on an yearly income of ,000. Assuming you earn ,000 annually, here are the asset tax amounts you would pay in each city...
Birmingham Al -- 8
Cheyenne Wy -- ,108
Phoenix Az -- ,248
Wichita Ks -- ,309
Denver Co -- ,362
Charleston Wv -- ,395
Oklahoma City Ok -- ,538
Kansas City, Mo -- ,595
Little Rock Ar -- ,648
Louisville, Ky -- ,713
Jacksonville Fl -- ,744
Honolulu Hi -- ,781
Billings Mt -- ,864
Salt Lake City, Ut -- ,904
Virginia Beach Va -- ,918
Jackson Ms -- ,971
Charlotte, Nc -- ,021
Boise, Id -- ,176
Columbia Sc -- ,214
Las Vegas Nv -- ,225
Sioux Falls Sd -- ,228
New Orleans, La -- ,231
Wilmington De -- ,416
Memphis Tn -- ,501
Albuquerque Nm -- ,517
Houston Tx -- ,861
The association in the middle of State income Taxes & asset Tax Rates
States with no income tax (see list below) usually have high asset tax rates in their respective counties (The state needs to get its income from somewhere!). However, the trade-off is that you will have zero taxes on all earned income. This can be a huge advantage. Instead of paying the state 7 to 15 percent (or more) of your income, you can keep your hard-earned money, and spend it back into real estate or other investments. There are currently nine states that do not tax income at the state level.
States With No income Tax
Alaska
Florida
Nevada
South Dakota
Texas
Washington
Wyoming
New Hampshire*
Tennessee*
*New Hampshire and Tennessee do not tax earned income, but they Do tax capital gains (dividend and interest income).
How To Find the Best of Both Worlds: Low asset Tax & No State income Tax
If you're finding for the best of both worlds (low asset tax and no state income tax), you may want to think the following cities:
Sioux Falls, Sd
Houston, Texas
Jacksonville, Florida
Memphis, Tn
Cheyenne, Wy
Las Vegas, Nevada
You can also scrutinize less familiar cities in the nine "no-income-tax" states. Smaller towns and cities commonly offer "quality of life" advantages, and higher-than-average price appreciation and growth.
Conclusion
Now you know which states don't tax income, and which areas have the lowest asset tax rates. Armed with this knowledge, you can focus on finding the best spot for your next home or real estate investment.
States With No earnings Taxes & States With Low asset Taxes
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