Property taxes are the lifeblood of local governments and municipalities across the United States, accounting for over 70% of all local tax revenue. Property taxes – such as taxes levied on homeowners and landowners – go to fund schools, parks, roads, and other public works and services.
While states typically impose a minimum property tax, property taxes are mostly determined at the local level – and are often a percentage of a property or home’s overall value. Depending on where you choose to buy a home, property taxes can range from negligible amounts, to nearly matching a mortgage payment. Here is a look at the most expensive town to buy a home in every state.
Using data from the Tax Foundation, a tax policy research organization, 24/7 Wall St. identified the states with the highest and lowest property taxes. States are ranked on their effective property tax rate – or the total amount of taxes paid on owner-occupied homes statewide as a share of the total value of those homes.
It is important to note that because property tax rates are typically decided at the local level, what residents pay in property taxes can vary considerably within a given state. Still, generally, the states that tend to have lower than average property taxes are mostly in the West and in the South, while property taxes tend to be higher in Northeastern states.
Some states, like Texas and New Hampshire, do not levy an income tax, and partially as a result, have a high effective property tax rate to offset the lost revenue. However, several of the states with the highest effective property tax rates, like New Jersey and Illinois, tend to have high taxes across the board. These are the states collecting the most income tax per person.