Property taxes in Tennessee are only about half the U.S. average and Georgia's rates are only about two-thirds as much, according to new government estimates.
The U.S. Bureau of Census reported that property taxes for the typical Tennessean rose last year by $2 a month to $924 per year, placing the Volunteer State among the 10 lowest-cost states for property taxes during 2008.
In Georgia, taxes on homes rose 5 percent during 2008 to an average of $1,298 per year. Georgia's average property tax bill was lower than all but 16 states, census figures indicate.
Nationwide, property taxes last year grew by an average 3.2 percent to an average of $1,897 per year.
Average Hamilton County property taxes were higher than the statewide average, but the county's average property tax bill was lower than two of the other Tennessee's three major urban counties -- Knox, Davidson and Shelby.
Hamilton County commissioners raised the countywide property tax rate in 2007 but not in 2008.
"I know we catch a lot of flak whenever we raise taxes, but we try to keep our rates as low as possible by holding our costs down," Commission Chairman Curtis Adams said. "When you compare our rates with most of the country, our tax rates are still very favorable."
Property taxes in Georgia and Alabama rose more than the U.S. average last year, but in both states the taxes were still only a fraction of the burden in high-tax Northeastern states. Alabama was second only to Louisiana for the lowest average property tax rate among the 50 states.
Real estate taxes last year were highest in New Jersey, with an average bill of $6,320, up from $6,082 the year before.
The lower property tax bills in the South reflect both lower tax rates and lower average home values, according to Gerald Prante, senior economist for the Tax Foundation in Washington, D.C., which analyzes the Census Bureau data.
The Tax Foundation calculates that average homeowners in Hamilton County spend 0.8 percent of their income on residential property taxes, or 20 percent less than the U.S. average.
Homeowners might appreciate the lower bills, but Mr. Prante noted that low-tax states also tend to spend less on public education and often have lower average student achievement.
"Property tax rates can help encourage or discourage people from moving into an area, but the quality of schools in an area is also critical and sometimes better schools are in areas with higher property taxes," he said.
"The No. 1 determinant in whether people move to an area is whether or not they benefit for the dollars they pay in taxes," he said.
Higher taxes, like more expensive goods, aren't always a deterrent, Mr. Prante said.
"If I can buy a Lamborghini for $30,000, that's still a great bargain even though it's more than the cost of a typical car," he said.