States With the Highest (And Lowest) Property Taxes
March 9, 2021
Nearly two-thirds of Americans are homeowners and are subject to property taxes, according to recent U.S. Census Bureau data. But property owners are not the only ones paying for location and services, according to a report released Tuesday by WalletHub.
"While most home buyers consider property taxes in deciding where to move, renters should also be aware of local taxes and services," Stephanie Leiser, a lecturer in public policy at the University of Michigan, told the personal finance site. "While renters may not directly pay the property tax bill, their landlords will bake those expenses into their rent payments."
In some states, property taxes are a bigger burden than in others, according to the report. While the average American pays $2,471 on property taxes each year, in some states people spend upward of $8,000 on average on taxes for a home priced at the state's median home value, while in others people spend as little as $1,715 on average annually.
Of the 10 states with the lowest real-estate tax rates, most are in the South or West, while six of the 10 states with the highest tax rates are in the Northeast, although the District of Columbia ranks among the states with the lowest real-estate tax rates. In blue states, according to the report, real estate taxes are 31.12% higher than in red states.
The report, which surveyed all 50 states and D.C., used U.S. Census Bureau data to determine the states' effective real-estate tax rate by dividing the median real-estate tax payment by the state's median home price, then using that rate to determine the tax on a $217,500 house, the median home value nationally.
Here are the states with the lowest effective real-estate property tax rates:
STATE | EFFECTIVE TAX RATE | ANNUAL TAXES ON $217,500 HOME |
Hawaii | 0.28% | $606 |
Alabama | 0.41% | $895 |
Colorado | 0.51% | $1,113 |
Louisiana | 0.55% | $1,187 |
South Carolina | 0.57% | $1,238 |
Delaware | 0.57% | $1,240 |
Here are the states with the highest effective real-estate property tax rates:
STATE | EFFECTIVE TAX RATE | ANNUAL TAXES ON $217,500 HOME |
New Jersey | 2.49% | $5,419 |
Illinois | 2.27% | $4,942 |
New Hampshire | 2.18% | $4,738 |
Connecticut | 2.14% | $4,658 |
Vermont | 1.90% | $4,135 |
Wisconsin | 1.85% | $4,027 |
Source: States With the Highest Property Taxes US News & World Report (February 23, 2021) Kaia Hubbard