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See how low property taxes in New Mexico are

Written by:
January 14, 2022
turtix // Shutterstock

This story originally appeared on Roofstock and was produced and distributed in partnership with Stacker Studio.

See how low property taxes in New Mexico are

Ask any homeowner about expenses and they’ll tell you: If you’re a first-time buyer, you need to carefully calculate the total cost of owning a home before taking the plunge into homeownership.

Owning a home comes with dozens of additional costs, from mortgage payments and interest to upkeep, renovations, and household utility bills. It doesn’t take long before expenses add up—especially when they come on top of potential property tax costs.

To determine which states offer the lowest in property taxes, Roofstock analyzed 2021 data from Wallethub and the U.S. Census Bureau. Costs were then determined for real estate property tax rates, median real estate tax payments, and median home prices for every state and Washington D.C. These amounts were then contextualized with what first-time homebuyers need to know about property taxes.

New Mexico by the numbers

- Effective real estate tax rate: 0.80%
- Annual taxes on $217.5k home: $1,740
- New Mexico's median home value: $171,400
- Annual taxes on New Mexico's median home: $1,371

If you’re considering a home purchase in New Mexico, the good news is that the real estate tax rates are extremely low in this state—and the taxes on real estate are only used to support local governments and services. As with many other states, New Mexico’s real estate tax rates are determined on a county level and what you pay is based on the market value of your property, which is assessed once per year.

While the annual assessment opens the doors for potentially higher taxes on your property, New Mexico residential real estate taxes are only calculated on one-third of the appraised value of your property. What that means is that if your home is valued at $150,000, you’ll pay taxes on just a third of that value—or $50,000. Plus, New Mexico limits property tax increases with a valuation cap, which limits annual increases in appraised value to just 3%, which keeps the overall taxes on homes in New Mexico extremely low.

In some states, the high cost of property taxes can cause a home with an otherwise affordable price tag to be well out of someone’s price range. In others, the low cost of property taxes could give you a little more wiggle room in your budget—which is never a bad thing.

If the idea of weighing the estimated costs of property taxes seems overwhelming to you, start by looking at the states with the lowest property taxes listed below. The national list is reverse-ordered by effective real estate tax rate, with Hawaii as the state with the lowest property taxes, though the results would look different if it was ordered by the taxes on the state's median home. Whether you're looking for a dream home or next big investment, owning a home comes with several additional costs, property taxes being one of them.

States with the lowest property taxes

#1. Hawaii: 0.28% effective real estate tax rate
#2. Alabama: 0.41% effective real estate tax rate
#3. Colorado: 0.51% effective real estate tax rate
#4. Louisiana: 0.55% effective real estate tax rate
#5. Washington, D.C.: 0.56% effective real estate tax rate

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