Home > Blog > How much does it cost to own a house in USA?

How much does it cost to own a house in USA?

Is it really that expensive to own real estate in the USA? The cost of maintaining a property varies greatly depending on the state, city, and even county where the home is located. But in any case, utility bills, annual taxes, and insurance pull in a very decent amount. Let’s figure out how much does it cost to own a house? What expenses you should think about and how much money it will take. Meet the tax guide! 

Property taxes 

Each owner of real estate in the United States once a year is required to pay property taxes, which average 1-2% of the value of the property. This money goes to the maintenance of the local municipality: schools, kindergartens, libraries, fire and police stations, emergency departments. Also, thanks to this tax, roads and highways are in working condition; parks are well-groomed and green, and recreation areas are always cleaned.

How is the tax amount calculated? 

The appraiser determines the average market value of the property, which is reviewed every two to three years. But the owner has the right to apply annually to revise this amount. At the same time, it does not matter at what price you bought a home — what matters is how much it costs on average on the market.

Example. You bought a $450,000 home in New Jersey with a recent appraisal of $510,000.

  • Around one-third of the appraised value is taken for calculation (in some districts this figure varies within 10–33%). That is — $ 170,000.
  • Further, the coefficient of the equation is used, which is determined based on the price of the object. It can be 100% (in this case, the amount will not change), be lower (if the property in the area is very expensive) or higher (if the property has fallen in price). Suppose that in our case it will be like this: 170,000 × 70/100 = $119,000.
  • Further, benefits are considered that apply to pensioners, the military, low-income persons, as well as those for whom the object is the main place of residence (homestead exemption). Let’s assume that the last case is yours and the discount is $9,000. That is, after deducting the benefit, $110,000 remains.
  • At the last stage, the amount is multiplied by the local rate. For the state of New Jersey, it is 2.35% (but it can be higher or lower in a particular county). 110k × 2/100 = 2.2k So the property tax you have to pay annually is $2.2k.

Utility bills. How much does it cost to own a house?

The amount of utility bills also varies not only in different states, but also in different cities. This is especially true of electricity rates, the cost of parking, and various subsidies from the state. 

The maintenance of even the most modest apartment will cost at least $150 per month, excluding insurance, parking, management company fees, and property taxes (if your home is yours). In states where the minimum wage is higher than the national average (for example, in California, the District of Columbia, and Massachusetts), this amount is higher. 


One of the biggest expense items. The average rate per kilowatt-hour is $0.13, but this figure can vary greatly depending on the state. 

Gas and heating 

With natural gas, the situation is similar, but the payment for it will depend on the presence or absence of central heating, as well as the specific state. For example, in the central states you will pay much less than in the northern ones. In houses where there is central heating, the amount for the consumption is fixed, does not depend on the meters and is included in the rent. If a boiler is installed in the house, then on average you will pay $ 80–100 for heating per month. 

In many homes in the southern states, heating is not provided at all. Therefore, for heating during the cold periods of the year, split systems are most often used, which are more expensive. 

Water and sewerage 

The average cost of a cubic meter of water is $0.6. Thus, a family of two spends $10–12 per month. You will have to pay extra $15-30 per month for sewerage. 

TV, phone, internet 

This item draws on a fairly large sum. The average cost of a package is $100–150 per month. In New York, the amount reaches $180–200. Moreover, Americans watch TV all the time, and use their home phones much more often than their mobile phones. Often there are situations when the Internet is divided into several apartments. 


Depending on the house, state, and the number of people in the apartment — $17-35 per month. 


Real estate insurance in the United States is a common service, although it is not mandatory. Almost everyone has fire insurance; often houses are insured against earthquakes, floods, and natural disasters. Additionally, they include air conditioners, electrical wiring, and plumbing in the policy. The annual cost of insurance is 1-5% of the cost of housing (depending on the included services). 

Owners Association 

If you bought an apartment in a residential complex, the homeowner’s association will most likely be responsible for the improvement of the adjacent territory. The organization is responsible for the repair and maintenance of the common space. Depending on what is included in their package of services, the monthly fee will vary from $50 to $4 thousand. Sometimes the monthly fee already includes garbage collection, fire insurance, water and sewer fees, parking, so separately for all you won’t need to pay. 

Property For Sale 

Capital gain tax

It is charged from the net profit from the sale if the property has been owned for more than a year. From the income received, you can deduct all the costs of improving housing during the period of ownership, taxes, the cost of insurance. Moreover, if the property being sold is used as a primary (own at least two years and lived at least two of the last five years) and initially cost less than $250,000, capital gains tax is not charged. 

That is, for a house bought three years ago for $200,000, in which you lived for at least two years and sold for $600,000, you can not pay capital gains tax. 

Federal state tax

It can range from 0% (Florida, New York, Tennessee) to 10% or more (California). If you are a non-US resident, the federal tax will in any case be 10% of the profit on the sale. But you can not pay it, provided that the initial value of the property is up to $ 250,000, and the new owner signs a document stating that they intends to permanently settle in the house for the next two years (at least six months each year). Additionally, if you rented out housing, you can deduct the amount of taxes paid on income from the net income.

Net investment income tax (NIIT)

Calculated at a rate of 3.8% and is applicable in situations where the net profit from the sale (after deducting all expenses) exceeds: 

  • $250,000 if a married couple files a tax return;
  • $125,000 if spouses submit separate declarations;
  • $200,000 in all other cases.

In addition to taxes, the seller bears the following costs 

  • Realtor services. On average, they are 5-6% of the value of the object. This amount is divided between the brokers of the seller and the buyer.
  • Lawyer. The services of a lawyer for the execution of the transaction vary in different states and can be $500-1000.
  • Title insurance. A guarantee for future owners in case something goes wrong with the property from a legal point of view. For example, “heirs” will suddenly appear. The amount of such insurance is an average of 0.5% of the value of the object.
  • Transfer stamps. Local sales taxes, the amount of which depends on the specific municipality. On average, the rate is $1.0-1.5 for every thousand dollars of the value of the object.


Don’t let taxes scare you — after all, you’re paying for your own home, not someone else’s mortgage (as is often the case with rentals). Contact us for a consultation and we will be able to find the right financing for you, taking into account all your needs! 

Subscribe to Our Newsletters and Get Your Free Guide to Smart Property Buying

    Stay informed, make informed decisions, and discover the secrets to successful real estate investments.

    Connect with us

    Whether you’re buying a home or are ready to refinance, our professionals can help