Where do American homeowners pay the most and the least in property taxes?
Every week, Mansion Global poses a tax question to real estate tax lawyers. Here is this week’s question.
Q. Where do US homeowners pay the most and least in property taxes?
A. New Jersey will continue its notorious reign as the US state where homeowners pay the most property taxes, according to a report published Wednesday by WalletHub.
In the Garden State, a homeowner with a home priced at the state’s median value, $335,600, would pay $8,362 in property taxes, the data shows. The property tax rate was 2.49%.
The report’s findings are based on 2019 U.S. Census Bureau data. While this is the most recent data available, it does not reflect the double-digit price increases seen in nearly all real estate markets nationwide. since the start of the Covid-19 pandemic.
To calculate property tax rates, the “median property tax payment” was divided by the “median home price” in each state. The resulting rate was then used to determine the amount paid as property tax on a home worth $217,500, the median home value in the United States in 2019 according to the Census Bureau.
Connecticut homeowners had the second-largest property tax burden, with the bill for a residence at the state’s median price of $275,400 rising to $5,898 a year, according to the report. Its property tax rate was 2.14%.
The state where people pay the third highest amount in property tax was New Hampshire, with $5,701 owed annually on a home with a median state price of $261,700, the figures show. There, the rate was 2.18%.
New York, Massachusetts and Illinois round out the top six, with homeowners paying $5,407, $4,679 and $4,419 per year, respectively. The states’ median home values were $313,700, $381,600 and $194,500, according to WalletHub.
California was also in the top 10 for highest property taxes paid, with homeowners owing $3,818 a year for a home at the median state price of $505,000, according to the report. Texas landed in the middle, with property tax bills of $3,099 on homes with a state median price of $172,500.
Continued: What property tax changes are on the table in Massachusetts?
On the other side of the spectrum, Alabama homeowners pay the least property taxes — $587 a year on a home valued at the state’s median value of $142,700, the data shows. Its property tax rate is 0.41%.
Other low property tax states include West Virginia, where property taxes are $698 per year on a home with a median value of $119,600, and Arkansas, where the tax burden is $798. $ on a residence priced at $127,800.
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