How High Are Property Taxes in Your State?

Today’s map takes another look at property taxes, this time focusing on states’ effective tax rates on owner-occupied housing. This is the average amount of residential property taxes actually paid, expressed as a percentage of home value.

Because property taxes are tied to housing values, it makes sense that the actual dollar amounts of property taxes tend to be higher in places with higher housing prices. This map takes housing value into account in order to give a broader perspective for property tax comparison.

States tax real property in a variety of ways: some impose a rate or a millage—the amount of tax per thousand dollars of value—on the fair market value of the property, while others impose it on some percentage (the assessment ratio) of the market value. While values are often determined by comparable sales, jurisdictions also vary in how they calculate assessed values.

Some states have equalization requirements, ensuring uniformity across the state. Sometimes property tax limitations exist which restrict the degree to which one’s property taxes can rise in a given year, and sometimes rate adjustments are mandated after assessments to ensure uniformity or maintenance of revenues. Abatements are often available to certain taxpayers, like veterans or senior citizens. And of course, property tax rates are set by political subdivisions at a variety of levels: not only by cities and counties, but often also by school boards, fire departments, and utility commissions.

Some states with high property taxes, like New Hampshire and Texas, rely heavily on them in lieu of other major tax categories. Others, like New Jersey and Illinois, impose high property taxes alongside high rates in the other major tax categories.

New Jersey has the highest effective rate on owner-occupied property at 2.21 percent, followed closely by Illinois (2.05 percent) and New Hampshire (2.03 percent). Hawaii sits on the other end of the spectrum with the lowest effective rate of 0.30 percent. The state is followed closely by Alabama (0.40 percent), Louisiana (0.52 percent), and Wyoming (0.55 percent).

How does your state compare?