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Property Taxes By State: A Look At The Best And Worst States In The U.S.

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Published on April 19, 2022
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With the increasing availability of remote jobs, home buyers may be willing to look across state lines for their next house. Considering states with lower property taxes or comparing different states will be an essential step as they begin the home buying process, especially since Americans pay an average of $2,471 in property taxes each year, according to recent U.S. Census data.

When looking at property taxes by state, the rates can differ greatly – from less than 0.5% in some areas to more than 2% in others. While every state imposes property taxes on homeowners, it can be helpful to understand how much you might end up paying each year by taking a look at where your state stacks up against others.

We’ll explore property taxes across the country and offer tips for how you can lower your property taxes below. We used the state effective property tax rates to get a general look at different property taxes across the nation. The taxes listed are high-level estimates. To find more precise estimates, check your state or local county websites.

Table Of Contents

    How Property Taxes Are Calculated

    When it comes to calculating property taxes for a certain area, this process starts with an assessor evaluating all the properties within the municipality. Next, the local government establishes the amount of money that is to be raised by the property taxes. Then, the property tax rate is calculated and finally, each property owner receives a bill.

    How property taxes are calculated can vary depending on state or local government. Some governments choose to tax property by imposing a rate or millage (the amount of tax per thousand dollars of value) on the fair market value of the property. Others impose property tax by a percentage of the market value of a home.

    Effective Property Tax Rate By State

    To compare property tax rates across the United States, we gathered effective property tax rate data from the Tax Foundation’s 2020 report (using 2019 calendar year data – the latest available) and then multiplied that by $350,300, the median home value in the U.S. as of May 2021, according to National Association of REALTORS®. This gives us a snapshot of what property tax rates may look like across the country.

    It’s important to note that effective property tax rates are a high-level way of finding and comparing property tax rates in different parts of the country. The only realistic way to find an approximate estimate of property taxes is to use a state or local property tax estimator. Find your local online tax estimator and applicable exemptions through your state or county website.

    A Look At Effective Property Tax Rates Across The U.S.

    1. New Jersey: 2.13%
    2. Illinois : 1.97%
    3. New Hampshire: 1.89%
    4. Vermont: 1.76%
    5. Connecticut: 1.73%
    6. Texas: 1.60%
    7. Nebraska: 1.54%
    8. Wisconsin: 1.53%
    9. Ohio: 1.52%
    10. Pennsylvania: 1.43%
    11. Iowa: 1.43%
    12. Rhode Island: 1.37%
    13. Michigan: 1.31%
    14. New York: 1.30%
    15. Kansas: 1.28%
    16. Maine: 1.20%
    17. South Dakota: 1.14%
    18. Massachusetts: 1.08%
    19. Minnesota: 1.05%
    20. Maryland: 1.01%
    21. Alaska : 0.98%
    22. Missouri: 0.96%
    23. Oregon: 0.91%
    24. North Dakota: 0.88%
    25. Georgia: 0.87%
    26. Florida: 0.86%
    27. Washington: 0.84%
    28. Virginia: 0.84%
    29. Oklahoma: 0.83%
    30. Indiana: 0.81%
    31. North Carolina: 0.78%
    32. Kentucky: 0.78%
    33. Montana: 0.74%
    34. California: 0.70%
    35. Idaho: 0.65%
    36. Tennessee: 0.63%
    37. Mississippi: 0.63%
    38. Arkansas: 0.61%
    39. Arizona: 0.60%
    40. New Mexico: 0.59%
    41. Delaware: 0.59%
    42. Nevada: 0.56%
    43. Utah: 0.56%
    44. South Carolina: 0.53%
    45. West Virginia: 0.53%
    46. Colorado: 0.52%
    47. Wyoming: 0.51%
    48. Louisiana: 0.51%
    49. Alabama: 0.37%
    50. Hawaii: 0.31%

    States With Highest Property Tax

    New Jersey, Illinois and New Hampshire top the list of states with the highest effective property tax rates. This means that, with the average home price in New Jersey at $500,628 in the first quarter of 2021, the homeowner would pay just over $10,660 in yearly property taxes.

    Based on effective tax rates and the U.S. median priced home of $350,330, here’s a list of the top 10 states for property taxes. Keep in mind, these are high-level assumptions using effective property tax rates and a national average home price. To find a more complete estimate, check your local/county website and use the actual value of a home in your area.

    • New Jersey (2.13% effective property tax rate, $7,461 estimated property taxes)
    • Illinois (1.97% effective property tax rate, $6,901 estimated property taxes)
    • New Hampshire (1.89% effective property tax rate, $6,621 estimated property taxes)
    • Vermont (1.76% effective property tax rate, $6,165 estimated property taxes)
    • Connecticut (1.70% effective property tax rate, $6,060 estimated property taxes)
    • Texas (1.60% effective property tax rate, $5,605 estimated property taxes)
    • Nebraska (1.54% effective property tax rate, $5,395 estimated property taxes)
    • Wisconsin (1.53% effective property tax rate, $5,360 estimated property taxes)
    • Ohio (1.52% effective property tax rate, $5,325 estimated property taxes)
    • Pennsylvania (1.43% effective property tax rate, $5,009 estimated property taxes)

    Some states make up for their high property tax rate by scaling back in other tax categories. For example, New Hampshire has no sales tax but has the third-highest effective property tax rate in the country.

    States With Lowest Property Tax

    When it comes to the opposite end of the spectrum, Hawaii offers the lowest effective property tax rates in the country at 0.31%. While that low rate may have you excitedly looking up beachfront properties, it’s equally important to note that Hawaii residents paid more than double the national average in state taxes in 2020. This is a good example of some states offering lower property tax rates in return for higher rates in other major tax categories.

    Alabama proves to be a very affordable state for homeowners. Not only does the state boast the second-lowest property tax rates, but Alabama also has the seventh-lowest cost of living. And if you’re looking for a state that offers a light tax burden, Wyoming has the fourth-lowest effective property tax rate and no state income tax.

    Again, these are high-level assumptions using effective property tax rates and a national median home price. To find a more complete estimate, verify with your county website’s online tax estimator using a specific home’s value.

    • Hawaii (0.31% effective property tax rate, $1,086 estimated property taxes)
    • Alabama (0.37% effective property tax rate, $1,296 estimated property taxes)
    • Louisiana (0.51% effective property tax rate, $1,787 estimated property taxes)
    • Wyoming (0.51% effective property tax rate, $1,787 estimated property taxes)
    • Colorado (0.52% effective property tax rate, $1,822 estimated property taxes)
    • West Virginia (0.53% effective property tax rate, $1,857 estimated property taxes)
    • South Carolina (0.53% effective property tax rate, $1,857 estimated property taxes)
    • Utah (0.56% effective property tax rate, $1,962 estimated property taxes)
    • Nevada (0.56% effective property tax rate, $1,962 estimated property taxes)
    • Delaware (0.59% effective property tax rate, $2,067 estimated property taxes)

    Lower property taxes don’t necessarily mean a lower total cost of living. Keep in mind, there are many factors to consider when trying to figure out what you can actually afford.

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    Average Property Tax Rate By Region

    Looking at regions across the country, the Northeast has the highest average property tax rate at 1.41%. This makes sense, as five out of 10 of the states with the highest effective property tax rates are found in that region of the country.

    Coming in at the lowest average property tax rate by region is the Southeast. States like Alabama and Louisiana have notably low property tax rates. In Louisiana, the state offers an attractive homestead exemption that reduces the taxable value of owner-occupied properties by $7,500 in assessed value.

    A Look At Average Property Tax Rates By Region

    1. Northeast: 1.41%
    2. Midwest: 1.29%
    3. Southwest: 0.91%
    4. West: 0.66%
    5. Southeast: 0.66%

    Cities With The Highest Property Taxes

    As for cities with the highest property tax rates, several cities in Texas and New Jersey made the list. While New Jersey is a state with the highest effective tax rates in the country, Texas falls at number six on the list. The Lone Star State has no personal income tax, which is a tax category many other states rely on. Texas also allows local taxing authorities to set their own property tax rates. Plus, real estate appraisal values within Texas continue to go up.

    These are high-level assumptions using effective property tax rates. To find a more complete estimate, check your county website.

    Small Cities With The Highest Property Taxes

    Small Cities

    Effective Property Tax Rate

    Elizabeth, New Jersey

    3.18%

    Paterson, New Jersey

    3.18%

    Waterbury, Connecticut

    3.16%

    Rockford, Illinois

    2.67%

    Peoria, Illinois

    2.59%

    Midsize Cities With The Highest Property Taxes

    Midsize Cities

    Effective Property Tax Rate

    Aurora, Illinois

    2.51%

    Rochester, New York

    2.25%

    Newark, New Jersey

    1.99%

    McKinney, Texas

    1.95%

    Des Moines, Iowa

    1.94%

    Large Cities With The Highest Property Taxes

    Large Cities

    Effective Property Tax Rate

    Milwaukee, Wisconsin

    2.17%

    El Paso, Texas

    2.13%

    Fort Worth, Texas

    1.86%

    San Antonio, Texas

    1.85%

    Arlington, Texas

    1.75%

    Table data sourced from Roofstock.

    How To Lower Your Property Taxes

    No matter where you live or what property tax rate your home is taxed at, there are steps you can take to try to lower the amount of property taxes that you pay.

    Apply For A Property Tax Exemption

    Depending on where you live, some states and local governments offer property tax exemptions to homeowners for real estate taxes owed on their property. These exemptions protect certain classes of homeowners like seniors, veterans, members of the Armed Forces and people with disabilities and helps reduce the amount they must pay for their property.

    File For A Homestead Exemption

    A homestead exemption shields a homeowner from paying for a certain dollar amount or percentage of their property tax. They’re called homestead exemptions because these are offered only to a homeowner’s primary residence, not rental or investment properties. Some states exempt a certain percentage of a home’s value from property taxes, while others set a dollar amount.

    Raise Issues With The Tax Assessor

    Your property tax bill is based on the assessed value of your property, any exemptions for which you qualify and the property tax rate for where you live.

    You can request a property tax card from your local town hall that serves as a record of all the information the town has gathered about your property over the years.

    After reviewing the card, make a note of any inconsistencies. Take those issues to your local tax assessor. They will either make a correction or conduct a re-evaluation. This can sometimes mean a lower property tax assessment that can translate to less money you owe in property taxes.

    The Bottom Line

    Property taxes are just one expense associated with buying and owning a home. It’s important to understand what costs you can expect in order to make an informed decision about where you should move to.

    Ready for the next step? Get preapproved today to find out what you can afford.

     

    Take the first step toward buying a house.

    Get preapproved to see what you qualify for.

    Start My Preapproval

    Take the first step toward buying a house.

    Get preapproved to see what you qualify for.

    Victoria Araj

    Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.