Percentages are a great way to rank states because they provide standardized figures for comparison. For example, someone in State A pays $10,000 in property taxes annually on a property worth $1 million. Someone in State B pays $10,000 annually on a condo worth $150,000.
The person in State A only pays 1% of their home's value, while the person in State B pays nearly 7% of their home's value. The person in State A gets a better tax rate, even though they both pay the same amount.
The Ten States with the Highest Property Taxes
Tax-Rates.org found that homeowners in the following states pay the most in property taxes. The ten states with the highest property taxes are:
● New Jersey: 1.89%
● New Hampshire: 1.86%
● Texas: 1.81%
● Nebraska: 1.76%
● Wisconsin: 1.76%
● Illinois: 1.73%
● Connecticut: 1.63%
● Michigan: 1.62%
● Vermont: 1.59%
● North Dakota: 1.42%
The Ten States with the Lowest Property Taxes
● Louisiana: 0.18%
● Hawaii: 0.26%
● Alabama: 0.33%
● Delaware: 0.43%
● District of Columbia: 0.46%
● West Virginia: 0.49%
● South Carolina: 0.5%
● Arkansas: 0.52%
● Mississippi: 0.52%
● New Mexico: 0.55%
These are median percentages derived using aggregated data. In each state, half of the tax rates are higher and half are lower (than this figure). So there you have it. Louisiana is the next best place after states with no property tax.
The difference between Louisiana, which has the lowest tax rate, and New Jersey, which has the highest, is as much as 1.71%. This may not sound like much, but when it is tied to the value of a home, it can result in very high property taxes, especially on luxury homes.
Property tax is the second largest expenditure for Americans on residential property after mortgage payments, and it is also a major source of local government revenue in the United States, accounting for about 70% of local fiscal revenue.