Whether you are among the two-thirds of Americans that own your home or the one-third that rent it, property taxes can have a significant impact on your personal finances.
WalletHub has ranked all 50 states and the District of Columbia to determine whose real estate property taxes take the heaviest toll on residents' bottom lines.
To determine state ranking of property taxes, from the lowest to the highest, WalletHub compared them by using 2017 U.S. Census Bureau data.
WalletHub noted that even renters are impacted by property taxes since the levies are usually passed through by property owners in the rents they charge.
"The average American household spends $2,279 on property taxes for their homes each year, according to the U.S. Census Bureau, and residents of the 27 states with vehicle property taxes shell out another $440," the report said.
To determine the "effective" property tax rate for each state, WalletHub divided the median real-estate tax payment by the median home price in each state.
"We then used the resulting rates to obtain the dollar amount paid as real-estate tax on a house worth $193,500, the median value for a home in the U.S. as of 2017 according to the Census Bureau," the report said.
Here, in ascending order, are the 10 states with the highest real estate property taxes in the nation:
10. Rhode Island
Among the 27 states assessing property taxes on vehicles, Rhode Island placed first with a tax rate of 4.40 percent. The Ocean State has an effective real estate tax rate of 1.66 percent.
9. New York
New York does not assess a vehicle property tax, but with a 1.68 percent real estate tax rate, you’ll pay $4,915 in property taxes on the Empire State's median home value of $293,000.
8. Nebraska
Two years ago, Nebraska reported a $900 million budget shortfall. Ever since, taxpayers have had to make up the difference. If you live in the Cornhusker State, you’ll pay an effective 1.80 percent property tax rate on real estate and a 1.59 percent property tax rate on your vehicle.
7. Texas
There is no state income tax in Texas, but the Lonestar State more than makes up for it in real estate property taxes, at an effecctive 1.83 percent rate. If you own a home in Texas assessed at the national median value of $194,000, you’ll pay $3,544 yearly in property taxes.
6. Vermont
Because Vermont has a progressive property tax, homeowners are eligible for a state tax credit of up to $8,000, depending on their income. With a real estate tax rate of 1.83 percent, wealthier property owners in the Green Mountain State subsidize the cost of public services less affluent property owners cannot afford.
5. Wisconsin
Badger State homeowners can blame their high property taxes on both the Wisconsin constitution’s uniformity clause, which effectively prohibits residential property tax relief, and local governments that rely on real estate taxes to fund public services. If you own a home in Wisconsin, you’ll pay a 1.94 percent effective property tax rate.
4. Connecticut
If you can afford to live in the Nutmeg State, you’ll pay a real estate property tax rate of 2.07 percent and an estimated vehicle property tax rate of 2.59 percent. The national median home value is $194,000, but in Connecticut, it's $270,100, with a yearly property tax of $5,582.
3. New Hampshire
Since New Hampshire doesn’t have a state income or sales tax to subsidize aid to local municipalities, it should come as no surprise that the Granite State has one of the highest real estate and vehicle property taxes in the country. New Hampshire has a real estate property tax rate of 2.20 percent and a vehicle property tax rate nearly as high of 1.80 percent.
2. Illinois
As public pension costs went up in the Land of Lincoln, so did local property taxes that paid for them. That’s why Illinois has a property tax rate of 2.31 percent. If you own property assessed at the state’s median home value of $179,700, you’ll pay $4,157 yearly in real estate taxes.
1. New Jersey
Whether you blame the Garden State’s highest property taxes in the nation on its high population density and correspondingly high demand for public services, high labor costs, high education costs, high public pension costs or high cost of living, the net result is the same. If you own property in New Jersey, you’ll pay an effective real estate tax rate of 2.44 percent. At the state’s median assessed home value of $321,100, you’ll pay $7,840 yearly in property taxes.
This full report can be viewed here.
