Depending on where you live, property taxes can be a small inconvenience or a major burden. But, where are the lowest, and highest, property taxes in the U.S.?
A recent Wallethub study analyzed the property tax rates state-by-state to determine the states with the lowest rates to check out, and states with the highest rates to avoid, based on median home value and homes valued at $244.9K.
States with the lowest property tax rates:
- Hawaii: 0.29% tax rate ($700 taxes on a $244.9K home, and $1,893 on a median value home of $662,100)
- Alabama: 0.41% tax rate ($1,007 taxes on a $244.9K home, and $646 on a median value home of $157,100)
- Colorado: 0.51% tax rate ($1,243 taxes on a $244.9K home, and $2,017 on a median value home of $397,500)
- Nevada: 0.55% tax rate ($1,346 taxes on a $244.9K home, and $1,736 on a median value home of $315,900)
- South Carolina and Louisiana: 0.56% tax rate (South Carolina: $1,379 taxes on a $244.9K home, and $1,024 on a median value home of $181,800), (Louisiana: $1,384 taxes on $244.9K home, and $983 on a median value home of $174,000)
- D.C.: 0.57% tax rate ($1,402 annual taxes on a $244.9K home, and $3,641 annual taxes on a median value home of $635,900)
- Utah and Delaware: 0.58% tax rate (Utah: $1,418 taxes on a $244.9K home, and $1,967 on a median value home of $339,700), (Delaware: $1,426 taxes on a $244.9K home, and $1,570 on a median value home of $269,700)
- West Virginia: 0.59% tax rate ($1,437 taxes on a $244.9K home, and $756 on a median value home of $128,800)
States with the highest property tax rates:
- New Jersey: 2.47% tax rate ($6,057 taxes on a $244.9K home, and $8,797 on a median value home of $355,700)
- Illinois: 2.23% tax rate ($5,465 taxes on a $244.9K home, and $4,744 on a median value home of $212,600)
- Connecticut: 2.15% tax rate ($5,256 taxes on a $244.9K home, and $6,153 on a median value home of $286,700)
- New Hampshire: 2.09% tax rate ($5,120 taxes on a $244.9K home, and $6,036 on a median value home of $288,700)
- Vermont: 1.9% tax rate ($4,652 taxes on a $244.9K home, and $4,570 on a median value home of $240,600)
- Texas: 1.74% tax rate ($4,255 taxes on a $244.9K home, and $3,520 on a median value home of $202,600)
- Wisconsin and New York: 1.73% tax rate (Wisconsin: $4,243 taxes on a $244.9K home, and $3,472 on a median value home of $200,400), (New York: $4,231 taxes on a $244.9K home, and $5,884 on a median value home of $340,600)
- Nebraska: 1.67% tax rate ($4,102 taxes on a $244.9K home, and $2,916 on a median value home of $174,100)
- Iowa: 1.57% tax rate ($3,843 taxes on a $244.9K home, and $2,522 on a median value home of $160,700)
Major takeaway:
On the topic of whether people consider property taxes when deciding where to move, Pippa Browde, professor of Alexander Blewett III School of Law at the University of Montana, commented:
“It is probably more common for people to consider real property taxes in situations where they are deciding where to live as between various suburbs of major metropolitan areas. For example, a person considering whether to live in a New Jersey suburb compared to a New York suburb outside of the New York City metropolitan area could weigh the various state income and property tax considerations between New York and New Jersey.
“In my state of Montana, there are no major metropolitan areas and it does not seem like property taxes are as big of a consideration. People moving to Montana are more likely to make a lifestyle choice than weigh property tax choices.”
Alex Combs, Ph.D., assistant professor of the Department of Public Administration and Policy at the University of Georgia, commented:
“People should consider property taxes when deciding where to move if for no other reason than to determine affordability. Differences in property taxes affect residential mobility patterns, so it seems the average person does consider property taxes. After all, people are sensitive to price, and the property tax is a visible cost of homeownership that funds generally desirable government services like education and public safety. If they have the opportunity, people are going to seek the biggest benefit for their property tax buck.”
Assaf Harpaz, visiting assistant professor of Thomas R. Kline School of Law at Drexel University, commented:
“People consider property taxes when deciding to move. Taxes affect how people behave–the ways spend, save, work, invest, and more. In recent years, taxpayers have been increasingly moving from high-tax to low-tax U.S. jurisdictions. For example, real property tax rates can incentivize or disincentivize homebuying. They can also motivate taxpayers to move from a high-tax to a low-tax locality because property taxes are generally imposed by local governments. But property taxes also include taxes on personal property and motor vehicles, typically taxed at the state level. Thus, property taxes are one decision-driving component in the broader tax system which often includes the state income and consumption taxes. State income tax rates, for example, are usually viewed as a greater motivator for inter-state migration because of their direct effect on income-earning individuals. The real property tax consideration weighs more heavily on homeowners and homebuyers, although the effects of real property taxes have profound implications on local prices and public services.”
For the full report, click here.
