Nobody likes paying property taxes, but they are an essential part of housing. They fund educational and infrastructure needs for cities, counties, and states across the US. However, property taxes vary across the nation. WalletHub recently reviewed the property taxes of all 50 states to highlight the variances from the nationwide average property tax of up to $2,089.
The Northeast and the Upper Midwest tend to have the highest property taxes, as shown by the following list of the states with the ten highest average property tax burdens.
1. New Jersey – The Garden State comes in first with an average $3,971 in property taxes. That may not be the reason New Jersey topped the 2014 list of residents moving out of the state (according to United Van Lines), but it is probably not helping people stay in Jersey.
2. Illinois – An average property tax of $3,939 has prompted Governor Bruce Rauner to suggest a halting of local property tax increases without voter approval. Let's see how far his proposal gets.
3. New Hampshire – New Hampshire has no income tax or sales taxes, and the money has to come from somewhere. The average $3,649 in property taxes fills a large part of the collective funding gap.
4. Wisconsin – With an average property tax burden of $3,398 and shrinking middle-class incomes, Wisconsin may be ripe for a round of property tax reform. Governor Scott Walker has constantly advocated lower taxes, and has more time to devote to the issue now that his Presidential campaign has ended.
5. Texas – Property taxes are appropriately Texas-sized at $3,327 on average. Much of this increase is relatively recent, with some areas having tripled their property tax over the last twenty years.
6. Connecticut – There may be disagreement on whether Connecticut should be the Constitution State or the Nutmeg State, but there is little disagreement that Connecticut's average property taxes are relatively high at $3,301.
7. Nebraska – The annual property tax bill of $3,228 has lawmakers debating tax reform, potentially lowering the total tax burden by $200 million. However, should this reform pass, expect money to show up in the state coffers from other sources to compensate.
8. Michigan – Property taxes are particularly painful in Michigan, given that Michiganders are below the US median in income but have the eighth-highest property taxes at $3,168. That sort of relationship can spell political trouble.
9. Vermont – Average property taxes have increased to $2,934, making property taxes a very active subject at the state and local government level. Governor Peter Shumlin has stated that property tax reform is a priority moving forward.
10. Rhode Island – Yet another Northeastern state with high property taxes, Rhode Island ranks tenth with an average $2,779 tax burden.
If you are looking for low property taxes, look to the mountain states and the South — but for the lowest property tax, look very far to the West. Hawaii, hardly a tax haven in most respects, does have the lowest property tax at only $482. That is far below second lowest, Alabama, at $752 and third lowest, Louisiana, at $832.
An interactive map showing the tax rankings may be found at http://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/. The site also shows the rankings for the 27 states that levy vehicle property taxes, led by Rhode Island with a whopping $1,133 on average.
Remember, just because you pay higher property taxes does not mean that they are not proportionate to what you receive in return. Dig into how your property taxes are allocated. Whether your property taxes are large or small, you owe it to yourself to verify that your tax dollars are being put to good use.
Get fast, easy, and FREE tax filing for simple returns with TaxAct!