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The interiors, lighting and
neighborhood of a house are the things we usually pay attention to while house
hunting. But let’s all agree that we don’t really prepare ourselves to fall in
love with the property tax rates too. Property taxes are just another tax that
homeowners have to learn to embrace paying every year.
If it’s any consolation, the revenue collected goes towards benefitting the locality you live in. It funds public schools, the cleanliness of the streets in your vicinity and several other small operations. So, you could practically see what your money is going into. Before we get into the property tax rates for each state, let’s understand more about this tax.
CALCULATE MY MOVE
Property taxes are an annual figure
paid by homeowners to the municipality or local government. If you fail to pay
property taxes, then a tax lien will be put on your property. Do note that tax
exemptions are provided to veterans, senior citizens and the taxable figure is
also reduced for homesteaders. You may want to look further into this if it
applies to you.
In simple words, you pay based on
how much your property is worth. The municipality of your district assesses the
value of all the homes in your vicinity. That amount is then weighed against
the expenses involved to maintain and execute certain operations for the
betterment of the community.
After taking these two aspects into
account, a tax rate is determined. Every homeowner in the locality must pay the
same annual property tax. This in turn helps the county have enough funds to
run the services they provide efficiently.
The town you reside in could potentially collect more property tax if they need funds to provide the county with more services. Keep in mind that property taxes vary based on city, county and state. There is no one rate that applies to all. You can read our Article on How Property Tax are Collected to get a more clear idea about this.
When you’re buying a new home in a
new city, you would inevitably want to know the finances you’d need to set
aside for property taxes. Few ways you can do this is by observing the city and
the locality you’ve picked.
Property taxes, like we said
earlier, are assessed based on the value of your property and the funds needed
to maintain the several services in the vicinity. So, try and notice things
like if there’s a ton of public schools around? Is a new road getting
constructed nearby? Or are there lots of new infrastructure coming up? By this
you’d be able to gauge that the municipality is making improvements and would
possibly collect a potentially higher property tax till those projects are
Your property is usually assessed
every year during the springtime (this varies from city to city, it could be
three or five years too). If you notice a discrepancy in the property tax
quoted on your tax bill, you can hire a realtor to understand the actual value
of your property. Overall, we’d say that the amenities (retail stores, bus
stops, parks) in the area do matter and largely affect the property tax you are
going to pay.
Also Read: The Lowest Cost of Living States in the US
West Rocky Mountains
Key Takeaway - The property taxes in all eight of the mountainous portions of the western USA is certainly below the national average of 1.1%. Colorado, Wyoming, Nevada, Utah and Arizona are the top five western states with low property taxes.
Key Takeaway - The West-Pacific is among the most desirable places to live in the country. If you’ve had your eye on any of these states, you’ll be glad to know that the property taxes aren’t ridiculously high.
Key Takeaway - Indiana, Missouri and North Dakota are the only Midwest states that present a property tax rate that is below the national average of 1.1%. Illinois is the only midwest state to be part of the top 10 states with the highest property tax rate in the country.
Also Read: 15 Reasons to Move to the Midwest
Key Takeaway - The property tax rates in each of the Northeastern states in the USA is way above the national average of 1.1%. If you’d like to reside in the northeast but save on property taxes, then Massachusetts and Maine are your best bets.
Key Takeaway - Besides Texas, all the states situated in the South of the United States have property taxes that are relatively way lower than the national average (which is 1.1%).
See also: 13 Reasons to Move to the Southeast
Key Takeaway - Property taxes in Hawaii are stunningly low. Even though Alabama is the US state with the lowest property taxes, Hawaii’s tax rates are a game changer. For example, if you buy a home for $683,470 in Hawaii, you’ll pay 0.26% (which is $1,777) annually. But for the same house in Alabama, you’ll be shelling out 0.42% (which is $2,870). The margin on how much you could save annually speaks for itself.
Just a heads up that this list shares the median property tax rate by state, things would always vary depending on the city or county you pick to move. For data we turned to the most trusted personal finance website Business Insider as well as WalletHub.
What is the nationwide average for property taxes?
1.1% of the home value is the
national average that residents in the USA pay for property taxes.
State with highest property tax?
New Jersey with a property tax rate
State with lowest property tax?
Alabama pays the least with a
property tax rate of 0.42%. If you consider the non-contiguous states then
Hawaii would take the spot with the lowest tax rate at 0.27%.
What are the top 10 states with high property tax?
What are the top 10 states that have the lowest property tax?
Which are the regions in the US with high property tax?
States that lie in the New England
region and Northeast corner of the United States have high property taxes.
Which are the regions in the US with low property tax?
Generally states that lie in the
Midwest and South portions of the nation have low property tax. However,
Arizona and Nevada are two westernmost states that also enjoy affordable
Which state has the highest homeownership rate?
The state of West Virginia has the highest homeownership rate which is 72.5% (according to USA Today). The property tax percent here is at 0.59%, which we must say is pretty low. This factor probably encourages residents to own homes. We’d also like to share that the median value of homes in this state stands at $113,626, in case you’d like to consider seeing prospective homes in West Virginia.
Vermont, Minnesota, New Hampshire
and Iowa are the other states with a high homeownership rate.
Which state has the lowest homeownership rate?
The state of New York has the lowest
homeownership rate in the US. Only 53.7% of the population own a home. The
property tax rate in New York is at a staggering 1.68%. The cost of living here
is also among the highest in the nation, so these stats definitely correlate.
California, Hawaii, Nevada and Texas are the other states with a low homeownership rate.
If you feel that you’re paying way
too much for property taxes annually, then here are few ways in which you can
verify and reduce the tax percent.
Hire a property assessor to check the
actual market value of your property. If the outcome is that the value is way
lower than what has been calculated by the county, you can claim for a
Ask neighbors and confirm if they
are paying the same rate as you. Try and find out why some properties have a
smaller property tax rate to pay. One of the reasons some homeowners in the
same vicinity pay less is that it could be a corner lot or a slightly smaller
lot. Observe and look for such homes while house hunting so that you still get
to enjoy the neighborhood but you pay lesser property tax.
If you run a business from your home, there could be certain exemptions for you. This also applies to veterans, senior citizens and so on. There are very few exceptional cases but it’s still worth a shot to look at these things to know if this could work in your favor.
Which state has no property tax for
Senior citizens in the state of
South Dakota can benefit from the state property tax relief program. South Dakota is also among the few states to
enjoy no state income tax. So it is a win-win situation for retirees.
Which states have the worst tax
California, Hawaii, Connecticut and
New York are few states that have it worst for residents taxwise.
Which are the most tax-friendly
states in the US?
Nevada, Tennessee and Florida are some of the most tax-friendly states in the
Which state has the highest property tax for 2021?
The state of New Jersey has the highest property tax for the year 2021 in the US. The median property tax rate here is at 2.47%.
states have highest property taxes?
The states with the highest property
states do not have property taxes?
Unfortunately, there are no states
in the U.S with no property taxes. The government needs property taxes for
different fundings like government services, police departments, water
districts, public schools, libraries, etc.
is the most heavily taxed state?
California is one of the most
heavily taxed states in the U.S. The combined local and state level sales tax
here can be about 8.66% on an average. Then there are also additional taxes
levied to the purchase of gasoline (12 cents a gallon), approximately $2.87 for
a pack of cigarettes, and an additional 33% for buying fruits from vending
machines among other things. The other heavily taxed states are New Jersey,
Vermont, Connecticut, Oregon and New York.
is the least taxed state?
Alaska, South Dakota, Wyoming,
Tennessee and Texas are some of the least taxed states in the U.S.
state has no property tax for seniors?
South Dakota does have property
taxes but it is one of the best states for retirees, especially because retired
homeowners can be eligible for property tax relief programs. It’s basically a
program where if eligible, you can get refunds on your property tax spends. To
add to that, South Dakota doesn’t have any state or income taxes, so your
retirement incomes such as pension or social security won’t be taxed.
state has cheapest property taxes?
The state of Hawaii has the cheapest property taxes in the country which stands at 0.28% as the average effective property tax rate. The other states with cheap property taxes are Alabama, Louisiana, Wyoming and West Virginia.
See Also: Moving To Louisiana – 2022 Cost of Living and Relocation Guide
are property taxes so high in California?
One of the reasons for the property
taxes being high in California is that based on the rate of the inflation in
the state, the assessed value of homes keeps increasing. So, in simple terms, the property taxes depend on
the purchased value of the house.
is Texas property tax so high?
Property taxes are calculated
depending on the percentage of your home value. In recent years, the value of
real estate in the state has been increasing. That’s why the greater the value
of your home, the higher your property taxes will be. To add to that, each
Texan local authority has the autonomy to set their respective taxes, so local
governments can set it high to meet the demands of the local counties
Texas uses its property taxes for
funding essential resources like road maintenance, safety measures, schools and
libraries, etc. But since Texas has no income tax to contribute to the state's
taxation revenue, property taxes are higher to make up for it.
can I live tax free?
You can live in the U.S by paying almost no or limited taxes
by being a part-time resident or getting a tourist visa and living in areas
near the country. Also, if you are an international student with F, J, M or Q
visa, you’ll be exempted from the Substantial Presence Test for your first five
years in the state. Even scholars can live tax free for two years in the
state, after which they need to pay the
Property taxes are things that cannot be avoided when you’re a homeowner. But when you get your first property tax bill as a new homeowner, you shouldn’t be surprised by the amount that appears there. This is why we highly recommend taking property taxes into consideration during a house hunt.
Learning more about how much you’d probably need to set aside beforehand will help you manage your budget better. As reports show, not all states share the same property tax percent. It varies from cities, counties and states. Overall, there’s several variables at play and it’s worth keeping these things in mind while looking for a new place to call home.
See also: Should You Move to a State with No Income Tax
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