According to the U.S. Census Bureau, homeowners in the U.S. pay an average of $2,690 in property taxes annually. The precise amount, however, changes with every state. These property tax rates by state depend on location, valuation, and municipal tax rates.
Despite the potential for financial gain, selling a house while navigating the state-specific complexities of property taxes can be challenging. Homeowners themselves struggle to grasp state-regulated property tax.
Property taxes cost the average American household 1.1% of their income. The property tax comparison by state is important for homeowners to budget effectively, estimate annual tax payments, and make wise real estate decisions.
🏡 Insights into Property Taxes by State
- With an average tax rate of 2.47%, New Jersey is one of the states with the highest property tax. The state tops the list with $3,580 in per capita property tax revenue.
- With an average tax rate of 0.29%, Hawaii is one of the states with the lowest property tax.
- The property tax in the US ranges from $215 per year in Madison Parish to $10,000 annually in many counties in New Jersey and New York State.
- State-by-state, the effective rates of property taxes vary from 0.29% in Hawaii to 2.47% in New Jersey.
What is Property Tax?
A property tax is a recurring yearly charge that local governments impose on the owners of real estate. Property tax is an ad-valorem tax, meaning the amount owed is a percentage of the assessed value of the real estate.
These real estate taxes by state are the main source of revenue for local governments. Knowing your state property tax is crucial for selling a home.
Factors Affecting Tax Rates State to State
Property tax rates vary by state due to several factors, such as:
Property Values
Typically, elevated property values correspond to greater tax obligations. State property tax rates are typically higher in states with skyrocketing property values, such as New York and California. Besides property price, location is also of paramount importance.
Tax Assessment Methods
While some states utilize market value, others utilize acquisition value or a hybrid approach. The differences in tax rates are based on different factors. Periodic reassessments also have an impact on tax liability.
Local Government Spending
Local governments that allocate greater resources towards critical services charge substantial taxes. These services include education, public safety, and infrastructure. The government revenue is derived from property taxes.
Tax Exemptions
Many states in the US provide a property tax deduction that includes:
- Senior Citizens Exemptions: Seniors 65 years of age and above are eligible for property tax discounts in several states/
- STAR (School Tax Relief) Participants: These exemptions aim to lessen the tax burden on households with children in school.
- Disability Exemptions: In certain states, property taxes are waived for people with impairments.
- Veterans Exemptions: Certain states offer veterans property tax incentives on their military records.
At a Glance: States Ranked by Property Tax
You can potentially maximize your profits by making well-informed decisions with this information at your service. Here’s a list of property taxes by state:
| State | Average Tax Rate (%) | Median Home Value ($) | Average Tax Per Household ($) |
| Hawaii | 0.29% | $715,900 | $2,076 |
| Alabama | 0.41% | $295,900 | $1,213 |
| Colorado | 0.51% | $624,000 | $3,182 |
| Nevada | 0.55% | $465,000 | $2,557 |
| Louisiana | 0.56% | $266,000 | $1,489 |
| South Carolina | 0.56% | $370,800 | $2,076 |
| D.C. | 0.57% | $701,895 | $4,001 |
| Delaware | 0.58% | $323,100 | $1,874 |
| Utah | 0.58% | $575,100 | $3,336 |
| West Virginia | 0.59% | $291,300 | $1,719 |
| Wyoming | 0.61% | $228,000 | $1,391 |
| Arizona | 0.62% | $471,300 | $2,922 |
| Arkansas | 0.62% | $251,900 | $1,562 |
| Idaho | 0.63% | $521,200 | $3,284 |
| Tennessee | 0.66% | $402,600 | $2,657 |
| California | 0.75% | $843,800 | $6,329 |
| Mississippi | 0.79% | $257,300 | $2,033 |
| New Mexico | 0.80% | $518,300 | $4,146 |
| North Carolina | 0.80% | $360,900 | $2,887 |
| Virginia | 0.82% | $447,500 | $3,670 |
| Indiana | 0.83% | $245,300 | $2,036 |
| Montana | 0.83% | $244,900 | $2,033 |
| Kentucky | 0.85% | $256,700 | $2,182 |
| Florida | 0.86% | $410,400 | $3,529 |
| Georgia | 0.90% | $376,700 | $3,390 |
| Oklahoma | 0.90% | $242,500 | $2,183 |
| Oregon | 0.93% | $527,600 | $4,907 |
| Washington | 0.94% | $668,400 | $6,283 |
| Missouri | 0.98% | $251,900 | $2,469 |
| North Dakota | 1.00% | $199,900 | $1,999 |
| Maryland | 1.07% | $416,800 | $4,460 |
| Minnesota | 1.11% | $349,000 | $3,874 |
| Massachusetts | 1.20% | $604,200 | $7,250 |
| Alaska | 1.22% | $371,500 | $4,532 |
| South Dakota | 1.24% | $312,700 | $3,877 |
| Maine | 1.28% | $348,600 | $4,462 |
| Kansas | 1.43% | $298,100 | $4,263 |
| Michigan | 1.48% | $249,100 | $3,687 |
| Ohio | 1.53% | $236,700 | $3,622 |
| Pennsylvania | 1.53% | $290,700 | $4,448 |
| Rhode Island | 1.53% | $429,200 | $6,567 |
| Iowa | 1.57% | $265,700 | $4,171 |
| Nebraska | 1.67% | $279,900 | $4,674 |
| New York | 1.73% | $559,900 | $9,686 |
| Wisconsin | 1.73% | $278,900 | $4,825 |
| Texas | 1.74% | $389,100 | $6,770 |
| Vermont | 1.90% | $365,100 | $6,937 |
| New Hampshire | 2.09% | $434,100 | $9,073 |
| Connecticut | 2.15% | $368,900 | $7,931 |
| Illinois | 2.23% | $286,800 | $6,396 |
| New Jersey | 2.47% | $454,500 | $11,226 |
The Highest Property Taxes per Person
New Jersey has the highest property taxes per person of any state in the union, with a typical payment of $8,797. This illustrates the impact of varying property tax rates and home values.
Tips on Reducing Property Tax
House owners can minimize their tax liability and retain more of their hard-earned cash by employing the appropriate strategies:
- Review your property evaluation thoroughly, and consider filing an appeal if the valuation seems irrational.
- Many states and local governments provide a range of exemptions. These include deductions based on homestead status, seniority, or disability. Apply for any exemptions to which you may be entitled.
- Potential tax savings can be realized through the installation of energy-efficient windows, solar panels, or insulation. All these decrease the assessed value of a property.
- Ensure that you are capitalizing on any tax exemptions or benefits that are applicable to the use of your property.
- Certain states provide deferment programs or installment payment plans. This assists individuals facing financial hardship in managing their property taxes in a timely manner.
- Assessment practices and property tax policies are susceptible to change over time. Keeping abreast of local developments can assist you in preparing for any modifications that could potentially affect your tax obligations.
- Assessment practices and property tax policies are susceptible to change over time. Keeping abreast of local developments can prepare you for any modifications that affect your tax obligations.
- Consult a tax expert or the assessor’s office to get invaluable counsel and tailored approaches to mitigate your tax liability.
Bottom Line
Acquiring the appropriate information can empower you to make well-informed decisions and potentially optimize your financial gains when arranging property taxes by state, which can be complex and daunting.
It is critical to comprehend how location, property type, size, and improvements can substantially affect your property tax rate.
Certain states, namely Hawaii and Alabama, present a more tax-friendly environment. In contrast, New Jersey and Illinois have the highest average property tax burdens.
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Frequently Asked Questions
Which state has the highest property tax?
New Jersey has the highest effective property tax rate at 2.49%. New Jersey homeowners pay a higher tax percentage than other states.
What state has the cheapest property tax?
Hawaii boasts the lowest rate at just 0.28%. The state's yearly tax payment is $1,971, which is significantly more. The next three states with the lowest property tax are Alabama (0.42%), Colorado (0.52%), and New Mexico (0.55%).
Which USA state has no property tax?
While there are no states without property taxes, some boast significantly lower rates than others. The three states that boast the lowest taxes are Hawaii (0.28%), Alabama (0.42%), and Colorado (0.52%).
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