Property Taxes – Dane County and Surrounding Areas
Property taxes are something to consider when purchasing a home. If you escrow for taxes, your taxes could be 1/3 or more of your monthly payment. Even if your home is paid off, property taxes will be a significant ongoing portion of your annual expenses.
We have had many clients who’ve commented things like, “I want to get outside of Dane County because the taxes are cheaper” or “I don’t want to live in Madison because I don’t want to pay the high taxes.” If you look at the mill rates and tax data, these statements don’t hold weight.
It is true that property values are less the further you get from Madison and the immediate suburbs (such as Verona Fitchburg, and Middleton). The Median home price in Dane County is currently $340,000,; you can certainly get a bigger, nicer house in Belleville, for example, as compared to Verona for that price. However, that does not mean the taxes are cheaper, it’s the contrary. Some of these smaller further out communities actually have higher tax rates because they have a smaller tax base while still trying to provide all the village amenities.
The chart below shows the taxes you’d pay based on a $340,000 home in the cities around Dane County and a few towns just outside of Dane County. It’s interesting that the 4 highest tax rates charted (Columbus, Lodi, Evansville, and Arena) are actually just outside of Dane County.
If you are thinking of moving further out for a cheaper cost of living, it is still a valid point. Back to the Verona & Belleville example. The house that you buy in Belleville for $320,000 would be something like $390,000 in Verona. Ultimately this does end up equating to a smaller overall monthly bill. Assuming you put the same down payment on each house and escrow for taxes, you’d spend about $350/month less in Belleville for similar houses. Although, a higher portion of your payment would be taxes if you were in Belleville.
The bottom line is, the myth that taxes are cheaper outside of Dane county isn’t true, but yes, the cost of housing overall is cheaper. Whatever you do, just look at all factors including taxes, insurance, drive time, fuel costs, etc. when planning where you want to move next.
You can look up property tax info for your area here.