The priciest property taxes
Property taxes vary greatly across the country, either representing a mere blip on the radar or a massive, savings-depleting annual cost. Want to make sure yours fall into the former category? Then avoid New Jersey – and head to Hawaii.
All hail Hawaii
WalletHub recently ranked all 50 states by both their real estate and vehicle taxes. Coming out on top for property taxes was sunny Hawaii, with a tax rate of just 0.27 percent. Taxes on a $185,000 home there run just $501 per year. On a median-priced home for the area ($538K), they clock in at just under $1,500.
For comparison’s sake, the average American pays $2,197 in property taxes annually. In the 27 states that have vehicle taxes, they pay about $436 a year.
Also coming in with low tax rates and average annual tax payments were Alabama, Louisiana, Delaware and the District of Columbia. Though Alabama has the second-lowest tax rate, it claims the single lowest property taxes when taking the median home value into consideration. Residents who own a $128K home – the state’s median price – pay just $550 a year.
Where to avoid
If you’re hoping to avoid sky-high property taxes, then steer clear of New Jersey. The state claims the nation’s highest tax rate at 2.40 percent. On a $185K home, a resident would pay more than $4,400 in annual property taxes – 8.9 times the costs Hawaiians face. On a median-priced home of $316K? They’d pay upwards of $7,600 a year.
Other states with high property tax rates were Illinois, New Hampshire, Connecticut and Wisconsin.
According to Stephen J. Lusch, Professor of Accounting in the Neeley School of Business at Texas Christian University, buyers should carefully consider location if property taxes are a concern.
“In states where property taxes are high, such as my home state of Texas, the location of your property can make a big difference though,” Lusch said. “There are areas of the Dallas/Fort Worth metroplex where if you purchase a house a block or two over, you may pay a few thousand dollars less in property taxes per year, because the property falls into a different county, city, school district, etc.”
Get today’s mortgage rates
Want to buy in one of the nation’s low-property tax areas? Shop around and see what mortgage rates you qualify for now.