Why are Property Taxes So High?
That’s the $64,000 question.
If you ask ten people this question, you will get ten different answers. Some will say because we have really good schools (which is true), others will say geographically we have a big state but a small population, while others will point to the fact that Nebraska has no natural resources to subsidize the state.
Whatever the reason, Omaha and Nebraska, in general, have pretty high property taxes.
Just How High are the Property Taxes?
According to the Nebraska Department of Revenue, in 2020 the average property tax rate in Douglas County was 2.3094% while Sarpy County (Papillion, Bellevue, and Gretna) was 2.2809%.
What that means is you multiply that percentage by the assessed value (more on that later) to get your property taxes.
If you buy a $1 million home in Omaha (Douglas County) your taxes will be $23,094 and in Sarpy County, it will be $22,809.
A $500,000 home will be half that, with Douglas County at $11,547 and Sarpy at $11,404.
$1 Million Home?!
Yes, that’s a lot of money. You can buy an amazing home in Omaha for a lot less. I’m using this number for demonstration purposes only. If you want to calculate the property taxes on a $200k home, just take the number I came up with for the million-dollar home and multiply by 20%. For $400,000 use 40%.
Nationwide, Nebraska is ranked 44th (higher is worse) in property taxes. And if you want to jump across the river and buy in Iowa, you won’t fare much better.
School District Impact on Property Taxes
I gave you the average property taxes for Douglas and Sarpy County but that only tells a small part of the story. Depending on which school district you live in and sub-division, your taxes could be quite a bit different.
Below is a list of mil levies for the different schools in the area. To make things a little easier to digest, I’m adding a ‘%’ sign to the number.
|Omaha Public Schools (OPS)||1.2408%|
|Elkhorn Public Schools||1.4230%|
|Douglas County West||0.9491%|
|Millard Public Schools||1.2201%|
|Ralston Public Schools||1.2492%|
|Bennington Public Schools||1.4298%|
|Westside Community Schools||1.3570%|
|Bellevue Public Schools||1.0661%|
|Papillion La Vista Community Schools||1.2906%|
|Gretna Public Schools||1.4159%|
OK, so what does this all mean.
If you buy a $1 million home in Bennington Public School District, the property taxes owed to the school are ($1 million X 1.4298%) $14,298.
But if you buy a home with that same value in Bellevue Public Schools the property taxes due to the school are ($1 million X 1.0661%) $10,661.
So, the school district matters.
In the section above where I gave you the average property tax rate of Douglas County (2.3094%) and Sarpy County (2.2809%), that included what is owed to the school.
Subdivision Impact on Property Taxes
The subdivision you live in can also have a major impact on property taxes.
This is especially true for newer sub-divisions.
In Nebraska, we have something called a Sanitary Improvement District (SID).
An SID is a way for developers to pay to develop raw land. It costs a lot of money to install streets, sewers, power, etc to a new subdivision.
The state allows the SID to collect additional property taxes from the residents to help pay for all the infrastructure.
In older neighborhoods, the infrastructure has already been paid for but that’s not the case in newer neighborhoods (and if you are looking at a home built in 2000, it could still have a SID).
Let me illustrate how the school district and SID can really increase property taxes.
Let’s take a $1 million home in midtown Omaha that’s in OPS and has no SID.
1.23310% (OPS) +
0.99102% (Other Services – which covers city budget, county budget, and several other things and will vary depending on if your home has been annexed by a city or not)
Total = 2.22412%
So for a $1 million home, the property taxes are $22,241.
Let’s do this calculation for a property in Elkhorn Public Schools (1.4230%) in the Blue Sage Creek subdivision (SID #575 – .9000%).
1.4230% + .9000% + 0.59919% (Other Services)
Total = 2.91719%
That $1 million home in Elkhorn Schools in Blue Sage Creek will have a property tax bill of $29,1719.
I tried to break this down as best I could. It can get a little bit complicated. But just know that there are several factors that impact your property taxes. The property taxes on a $1 million home can swing $8,000 or more based on where it’s located.
Calculating Property Taxes
The property tax amount is calculated by multiplying the assessed value by the levy.
Properties are SUPPOSED to be be assessed at or near 100% of market value. So, if you buy a home for $400,000 it should be assessed the following year pretty close to that amount. That’s how it works in theory but in reality, assessments always lag behind.
It’s very likely you will buy a home that is under-assessed. Just beware that your property taxes could go up based on the assessor updating the property’s assessment. Changes in the assessment are done once per year and you can always protect the value if you think it’s wrong.
The mil levy is the other important component of property taxes. The mil levy as we discussed above can vary greatly from location to location.
To find the mil levy for a particular property, your best option is to visit the local assessor website and search for the property (you can also search by subdivision).
On the Douglas County Assessor’s website, you can get a lot of information. You can see the home’s current and past assessments. You might also be able to see how much the current owner paid for the property.
To get the mil levy on the Douglas County Assessor’s Website, you will find property you are interested in and at the top, click on “Treasurer’s Tax Report.”
You will then look for the “Tax Levy” and if you want a complete breakdown just click on “Levy Info” and you will see the information below.
The “2.22412” number at the bottom is what is used to calculate property taxes.