Do Renters Pay Property Tax

The truth about who's on the hook for property taxes

One of the benefits of renting an apartment is less responsibility. Of course, you'll want to keep your apartment in good enough shape to get your damage deposit back, but you're free from having to deal with maintenance issues, upkeep of commons areas, and many of the financial headaches that go into owning a home. However, you're not completely safe from that last point while you don't have to worry about mortgage payments, there are other fees associated with homeownership that will cost you, at least indirectly. The primary concern for many renters is how much they'll be paying in rent, and what exactly is included in that amount. Included line items like utilities help you know exactly how much you'll be paying every month, so you've probably asked yourself, Do renters have to pay property tax? The answer is yes, in a way.

How Property Taxes Work

Property taxes are set by municipal or state governments based on the local tax rates and the value of the property. These taxes go toward maintaining infrastructure, paying public workers, and other things that benefit the community. You might expect a higher value home to use more or get more value from city services like firefighting, so naturally more expensive homes in more expensive areas pay higher property taxes. This brings us back to the question: Do renters pay property tax? Simply put, it is the legal responsibility of the property owner to pay the property taxes. You'll never have the government coming after you for unsubmitted property taxes for the apartment you rent. So why did we say earlier that you do pay property taxes on your rented apartment? Read on to find out
do renters pay property tax

How Your Rent Is Calculated

Your landlord rents the property for one reason: to make money. To turn a profit, your landlord has to consider all of the costs that go into property ownership and upkeep. They have to charge their tenants at least enough to cover all these expenses so they're not losing money on their investment (and of course they'll add enough to provide themselves with a good income). So, when you pay your rent, you're paying for your landlord's insurance, their maintenance fees and utilities for the property, any HOA fees, and so on. This is how you are, in essence, paying property taxes on your rented apartment. Though your landlord can spend your rent money on whatever they like, the reality is that the cost of their property taxes is reflected in your rent.

do renters have to pay property tax

How Much You'll Pay

Now you know that you will be covering your landlord's property taxes through your rent, but how much will it cost you? That depends on a few things. Different states, cities, and neighborhoods can have vastly different property tax rates. Your neighbor could be paying less in property taxes than your landlord. As mentioned, this is partly because homes can have different taxable values, but rented properties can also have higher taxes than owner-occupied ones. Furthermore, some states have laws in place that help protect homeowners from big increases in property taxes, protections that don't apply to rented properties. When it comes time for lease renewals, any increased tax burden on your landlord will be passed on to you through steeper rent prices. Ultimately, you have to be comfortable with the rent you're paying, regardless of where it goes.