Ranking the States With the Highest Property Taxes
As of 2021, almost two-thirds of Americans are homeowners, according to data from the U.S. Census Bureau, with a median home value of $217,500. The average American homeowner pays $2,471 in property taxes each year, but the amount varies widely from state to state. The best way to compare property tax rates in different locations is to determine the effective tax rate, which is calculated by dividing the average real estate tax payment by the average home price in the state. Read on as we count down the 15 states with the highest effective property tax rates.
The Midwest may not generally be associated with high taxes, but that doesn’t stop Kansas from taking the first spot on the list at number 15. The state has an effective tax rate of 1.41 percent based on an average home value of $151,900, which is substantially lower than the national average. Property taxes have been on the rise in Kansas for decades, and there’s no sign that they’re slowing down anytime soon.
In comparison with other states, Michigan has pretty low income tax rates, with a flat rate of 4.25 percent for all earners. When it comes to property tax, on the other hand, the state falls toward the high end. With an average annual property tax of $2,381 and an average home price of $154,900, Michigan has an effective tax rate of 1.54 percent.
Ohio may have inexpensive housing, with an average home price of just $145,700, but the state’s property taxes are some of the highest in the country. Although the state’s effective property tax rate is 1.56 percent, rates within the state vary widely, with Cuyahoga County having a rate of 2.44 percent while Lawrence County comes in at an incredibly low 0.87 percent.
The Hawkeye State is known for high taxes on both income and property. While the cost of a home in Iowa is extremely affordable compared to most other states, coming in at an average of just $147,800, the state’s effective tax rate is still a staggering 1.57 percent.
Pennsylvania may be for lovers, but it’s not for those who don’t love paying high property taxes! With a median value of $180,200, houses in the state may be affordable, but the effective tax rate is 1.58 percent, the 11th highest in the country. That said, Pennsylvania is surrounded by other states with high property taxes. In fact, New Jersey and New York rank even higher on the list.
10. Rhode Island
The nation’s smallest state still manages to make it into the top 10 for highest property taxes. Little Rhody also has a high sales tax rate, making this tiny state an expensive place to live. Home prices are above average as well, with a median cost of $261,900. Given that Rhode Islanders pay an average of $4,272 in property taxes each year, the effective property tax rate is 1.63 percent.
9. New York
You might expect the Empire State to rank even higher on this list as a result of the generally high costs in New York City, but it sits at number nine, with an effective tax rate of 1.72 percent. As one would assume, property costs in New York are high, with the average price of a home coming in at $313,700. That means New Yorkers pay an average property tax bill of $5,407, putting them in fourth place for total property taxes paid.
In Nebraska, it’s easy to find affordable homes to buy, with a median home value of $155,800, but property taxes are comparatively high at 1.73 percent. Some speculate that property taxes are high in Plains states like Nebraska because they have large areas with low populations, which means they need higher rates to fund local governments.
By both area and population, Texas is the second-largest state in the country, but it comes in seventh in effective property tax rates. The Lone Star State has a relatively low cost of living, and the average home comes in at just $172,500. But with an average annual property tax payment of $3,099, homeowners have to deal with an effective property tax rate of 1.8 percent. The high figure could be the result of low sales taxes and the fact that the state doesn’t levy its own income tax, so local governments rely disproportionately on property tax.
America’s Dairyland is one of the coldest states, and homeowners pay a pretty penny in property taxes for the privilege of weathering frigid temperatures. Despite the fact that the median home cost is substantially lower than the national average of $180,600, Wisconsin residents still end up paying an average of $3,344 in property taxes each year, thanks in part to high government spending.
Foodies love Vermont for its maple syrup, delicious cheeses, and, of course, Ben & Jerry’s ice cream. But even the most enthusiastic epicures have to think twice before moving to a state with such high property taxes. The effective tax rate is 1.9 percent, based on a median home value of $227,700, which is just over the national average.
Small but pricey, Connecticut is the fourth most densely populated state, and it also comes in fourth in the highest effective property taxes. With a relatively high average home cost of $275,400, the state’s effective property tax rate comes in at 2.14 percent. These rates have risen in recent years, even as the cost of homes has fallen.
3. New Hampshire
New Hampshire, which has the honor of holding the first presidential primary in each election cycle, comes in third in property taxes, with an effective tax rate of 2.18 percent. While the average home price of $261,700 isn’t much more than the national average, the average property tax of $5,701 is pretty hard to swallow.
While most of the states at the top of the list are located on the East Coast, Illinois, which comes in at second place, breaks the mold. With an effective property tax rate of 2.27 percent, the Prairie State has sky-high taxes. Interestingly, however, the median price of a home in the state is lower than the national average, coming in at just $194,500, which means that the overall cost of owning a home isn’t prohibitively high.
1. New Jersey
The most expensive place to own a home in the country is without a doubt New Jersey, which has an effective property tax rate of 2.49 percent. In fact, the average New Jersey homeowner pays a whopping $8,362 in property taxes alone! Because of New Jersey’s desirable East Coast location and proximity to New York City, the median home value is also among the highest in the United States, at $335,600.
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