The 15 Worst States for Property Taxes

A picture of a big house, likely with high taxes

Real estate property taxes can make that dream home unaffordable | iStock.com

Property taxes are like a hidden fee on homeownership. You don’t always see them, but they’re there, quietly accumulating in the background until your local county sends you a tax bill. Property taxes are typically based on the value of the home as determined by a formula, not necessarily equal to its cost or price. The value assessment of a home is then multiplied by the local tax rate to find the property tax amount owed by the homeowner. Property taxes can vary dramatically by county as well as state.

State and local governments rely heavily on property taxes. In fact, property taxes account for roughly one-third of all state and local tax collections in the United States, according to the Tax Foundation. That makes property taxes the largest source of state and local tax collections. Yet some residents hardly notice their modest property tax bills, while others may consider moving to a more affordable location in lieu of spending thousands of dollars a year on real estate taxes.

In order to find out who has the biggest property tax liabilities, WalletHub recently analyzed the 50 states and the District of Columbia in terms of real estate property taxes. The site used data from the U.S. Census Bureau to determine real estate tax rates. WalletHub also used the rates to obtain the dollar amount paid in real estate taxes on a median value home in each state. On average, American households spend $2,149 each year on property taxes for their homes.

Let’s take a closer look at the 15 states with the highest property taxes on homes. Remember, be careful what you wish for. Real estate taxes are only one way a state collects revenue from taxpayers.

15. Kansas

Effective real estate tax rate: 1.40%

Kansas ranks as the No. 15 worst state in America for property taxes. Residents can be thankful for a low cost of living that helps ease a high effective real estate tax rate. Kansas has a median home value of only $132,000, resulting in a $1,849 tax bill. In comparison, Colorado only has an effective real estate tax rate of 0.60%, while Missouri has 1%.

14. Iowa

Iowa fans hold up a sign of support.

Iowa fan clearly not talking about the property taxes | Streeter Lecka/Getty Images

Effective real estate tax rate: 1.48%

The Hawkeye State ranks as the No. 14 worst state for property taxes, but once again, a low cost of living means it could’ve been much worse. Iowa has one of the lowest median home values in the nation at $129,200. WalletHub finds residents can expect to pay $1,916 in property taxes with that home value. However, neighboring states Nebraska and Wisconsin both rank worse than Iowa.

13. Pennsylvania

Poor Pennsylvania town of Reading

Downtown Reading | Spencer Platt/Getty Images

Effective real estate tax rate: 1.53%

The Northeast is no stranger to expensive living. Pennsylvania is one of many states in the region that ranks poorly for property taxes. A state median home value of $166,000 translates into a tax bill of $2,533. Residents won’t find much relief unless they’re willing to move to West Virginia or Delaware, which have some of the lowest property tax rates in America.

12. Ohio

Cleveland, Ohio

Ohio | Jeff Swensen/Getty Images

Effective real estate tax rate: 1.56%

Ohio ranks as the No. 12 worst state for property taxes. The state’s saving grace for taxpayers is a median home value of only $129,900, which results in a tax bill of $2,032. On the positive, Ohio doesn’t have vehicle property taxes, and neighboring states Indiana, Kentucky, and West Virginia all offer more affordable home property taxes for those people willing to move.

11. New York

Albany, New York state capital

Albany, New York state capital | iStock.com/lavendertime

Effective real estate tax rate: 1.62%

You knew New York was on the list somewhere. While an effective tax rate of 1.62% doesn’t seem too bad, keep in mind that New York has some of the priciest real estate in America. The state’s median home value is $283,400, resulting in a $4,600 tax bill, according to WalletHub. That’s the fourth highest tax bill amount in the rankings.

10. Rhode Island

Large homes in Rhode Island

Rhode Island real estate, you can almost see the property tax bills from here | iStock.com

Effective real estate tax rate: 1.63%

Rhode Island ranks as the No. 10 worst state for property taxes. Rhode Island is America’s smallest state, but it hands out one of the nation’s largest property tax bills. A median home value of $238,000 in Rhode Island will run you $3,884 in taxes. Adding insult to injury, Rhode Island also ranks as the No. 1 worst state for vehicle property property taxes.

9. Vermont

A forest in Vermont

Vermont | iStock.com

Effective real estate tax rate: 1.74%

Vermont is a little cheaper than the previous mentioned northeastern states, but not by much. The state’s median home value of $217,500 leads to a tax bill of $3,795, with no relief from surrounding states. Homebuyers can take pleasure in not having to pay vehicle property taxes.

8. Michigan

Run-down house in Detroit

Run-down house in Detroit | J.D. Pooley/Getty Images

Effective real estate tax rate: 1.78%

Michigan ranks as the No. 8 worst state for property taxes. While the state has a high 1.78% effective tax rate, many people would like to have its affordable housing options (without the economic hardships) that help keep tax bills under control. Michigan’s median home value of $122,400 results in a $2,174 tax bill.

7. Nebraska

A creek in Nebraska

Nebraska | iStock.com

Effective real estate tax rate: 1.85%

The home of Warren Buffett ranks as the No. 7 worst state in America for property taxes. If Nebraska’s effective real estate tax rate was applied to the national median home value ($179,000), the tax bill would total just over $3,300. Instead, residents can expect to pay $2,467 in property taxes since the state’s median home value ($133,200) is significantly lower.

6. Texas

Texas has bigger property tax bills

Even tax rates are bigger in Texas | Thinkstock

Effective real estate tax rate: 1.90%

Yes, everything is bigger in Texas, and that includes getting more bang for your home-buying buck. Texas has a higher effective real estate tax rate than most of the country, but the median home value is only $136,000. That results in a tax bill of $2,578, not so scary compared to many of the states on the list.

5. Wisconsin

State Capitol building in Madison Wisconsin

State Capitol building in Madison Wisconsin | iStock.com/csfotoimages

Effective real estate tax rate: 1.96%

Wisconsin ranks as the No. 5 worst state for property taxes. With a state median home value of $165,800, the tax bill comes to $3,248, according to WalletHub. Neighboring states don’t fare much better, as Minnesota, Iowa, Michigan, and Illinois all rank worse than average.

4. Connecticut

highway traffic

Connecticut workers staying late to pay for property tax bills | Spencer Platt/Getty Images

Effective real estate tax rate: 1.97%

Connecticut is the last state on the list with an effective real estate tax rate below 2%. However, with a state median home value of $270,000, the tax bill comes in at $5,327. That’s the third highest tax bill on the list.

3. New Hampshire

Trees and nature in New Hampshire

New Hampshire | Thinkstock

Effective real estate tax rate: 2.15%

The Northeast strikes again. New Hampshire ranks as the No. 3 worst state for property taxes. The small state has a median home value of $237,300, resulting in a tax bill of $5,100. New Hampshire holds the title of being the first state to break the 2% tax rate on the list. The lesson here is to definitely make sure your budget can truly handle a home in the Northeast.

2. Illinois

Downtown view in Illinois

Illinois | Scott Olson/Getty Images

Effective real estate tax rate: 2.30%

Illinois ranks as the No. 2 worst state for property taxes. Despite the high effective real estate tax rate, the tax bill is not too terrible at $3,995, since the state median home value is $173,800. The best ranking neighbor state is Kentucky, which ranks No. 23 best in the nation.

1. New Jersey

New Jersey skyline

New Jersey | iStock.com

Effective real estate tax rate: 2.35%

New Jersey ranks as the worst state in America for real estate property taxes. With a rate of 2.35% and a state median home value of $315,900, New Jersey completely skips the $6,000 tax bill range. WalletHub finds the typical tax bill hits a whopping $7,410, compared to $4,189 if New Jersey homes were priced more in-line with the national median.

More from Culture Cheat Sheet:

More Articles About:   ,