Houses, Apartments, and Property Tax Incidence

W05-2: The property tax on housing is a major component of local government revenues and of consumers’ housing costs. This study uses newly available data from the 2001 Residential Finance Survey to investigate the incidence of the residential property tax. Of particular interest is the estimation and interpretation of differences in tax rates by location, property value, structure type, and tenure form. The study finds that multifamily rental housing bears an effective tax rate at least 25 percent higher than the rate on single-family owner-occupied housing for the nation overall. The level of taxation, and the apartment/house differential, varies considerably from place to place. Much, but not all, of the differential is associated with the lower property values per unit of apartments compared to houses…