Property taxes have been a bone of contention for many residents of Pennsylvania. There’s been debate in the state legislature in the last several years to eliminate school property taxes and effectively replace them with funds from personal income and sales tax.  The proposal, Bill SB 76 — or the Property Tax Independence Act, aims to increase the state’s personal income tax rate and expand the state sales tax to items that are currently tax exempt. Those supporting the bill say it would give homeowners relief, especially seniors and those with lower incomes. But those opposed point out that the bill may hurt some small business owners who use rental properties as income. Unlike principal residents, those properties would not be exempt under the bill. 

Plans to kill school property taxes have been widely debated by state legislators, who have never been able to come to any sort of agreement. Pennsylvania is among the top 20 most burdensome states, with an average tax burden of 10.2%, according to Tax Foundation. And the Commonwealth is one of the highest taxed states with respect to property taxes in the country, sitting in 13th place, with an average effective property tax rate of 1.55%. 

Property Tax Rates in Pennsylvania

According to SmartAsset, the median property tax rate in Pennsylvania is $3,765 per year for a home that holds a median assessed value of $250,000 in 2018. Tax rates are expressed in mills or $1 for each $1,000 of assessed property value. Each county in the state has its own methodology for determining assessed property values that include county, municipal and school taxes. Therefore, a fair comparison for taxation among all counties is based on the effective tax rate or what percentage of a home's median value is spent annually on property taxes. Essentially, a $3,000 tax levied on a home with an assessed value of $200,000 produces an effective tax rate of 1.5%, or (property tax/assessed property value)*100.

The highest effective property tax levels in the state are seen in Monroe County at 2.41%, where the median assessed value of a home is $170,600. The median annual tax payment in that county was $4,105. By contrast, Bedford County, just south of Altoona and bordering Maryland to the south, has an effective rate of 0.90% on a median home value of $125,000. The average annual tax payment in that county was $1,124.

Pennsylvania Taxes Compared to Neighboring States

Pennsylvania's average effective property tax rate as of 2018 was 1.55%, ranking 13th highest in the nation. On a property valued at $250,000, a homeowner would expect to pay $3,765 per year at that rate. Compared to the national average rate of 1.21%, Americans would expect to pay $3,028 per year in property taxes for a home of the same value. 

While New York City has one of the highest costs of living in the United States, its effective tax is 0.80%. This is less than half the 1.65% average rate in the rest of the state, slightly above the 1.55% average rate in Pennsylvania for 2018. 

Maryland ranks tied for 21st in the nation for effective property tax rates among states in 2018. With a 1.10% rate, the state has counties such as Montgomery, just north of Washington D.C., that have some of the highest median home values in the nation. In Montgomery County, where the median home value is $460,100, a homeowner pays a median annual tax of $4,259.

The Bottom Line

Many Pennsylvanians primarily clamor for reform to school tax, the largest component of a resident's annual property tax bill. Seeing the power of school districts to continually raise taxes to state-allowed maximum thresholds, residents are left to wonder how and when relief might come. In the meantime, residents are still among the highest taxed in the nation when it comes to property taxes, even compared to the national average. 

Vermont Property Tax Guide

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