These 5 States Have the Highest Property Taxes in America (2024)

FAQs

What state has the highest property tax in the United States? ›

1. New Jersey. New Jersey earns the top spot as highest property taxes not only in property tax rate, which is over the 2% mark, but in the actual dollars spent in property taxes; here the average home value is the highest on the list.

States With Highest Property Tax

The ten states with the highest property taxes in the United States are as follows: New Jersey, Illinois, New Hampshire, Vermont, Connecticut, Texas, Nebraska, Michigan, Wisconsin, and Ohio. New Jersey ranks first with a property tax rate of 2.13%, followed closely by Illinois at 1.97%.

Though Texas has no state-level personal income tax, it does levy relatively high consumption and property taxes on residents to make up the difference. Ultimately, it has a higher effective state and local tax rate for a median U.S. household at 12.73% than California's 8.97%, according to a new report from WalletHub.

1. Bridgeport, Connecticut. It's no real surprise that one of the wealthiest cities in the U.S. also imposes some of the highest taxes. In Bridgeport, as of 2022, approximately 20% of families that live here report income of $200,000 or more.

All of the data below comes from the Census Bureau's 2021 1-year American Community Survey (ACS) Estimates. Hawaii has the lowest property tax rate in the U.S. at 0.27%. The Aloha state has a home median value of $722,500.

What Are the Average Property Tax Rates in Florida? According to the Tax Foundation, Florida ranks No. 26 when it comes to property taxes paid as a percentage of housing value, with an effective property tax rate of 0.91%. But remember, not everyone in Florida has the same property tax rate.

“Property taxes in Texas are so high because that's the price we pay for not having a personal income tax in this state,” Craymer said. State tax systems are usually looked at as a three-legged stool — one leg is property tax, the second leg is sales tax, and the third leg is the personal income tax.

That includes income, property, sales and other taxes. Florida's combined rate is 8.21%. Texas' is 12.73%. The real estate taxes in Texas are the sixth highest nationwide, amounting to over $4,200 annually on average. California's rate ranks 36th.

Who pays the most taxes? ›

The highest-earning Americans pay the most in combined federal, state and local taxes, the Tax Foundation noted. As a group, the top quintile — those earning $130,001 or more annually — paid $3.23 trillion in taxes, compared with $142 billion for the bottom quintile, or those earning less than $25,000.

According to the study, the annual taxes on a home priced at the median value in Texas is $3,520. In Arizona, it is $1,648.

Honolulu had the lowest effective property tax rate in 2022. Your browser does not support the audio tag.

Like most governments, California relies primarily on taxes to fund the public services that it provides to its individuals and businesses. California's state and local governments raise well over $200 billion annually in own-source revenues to provide public services, with roughly 60 percent of this from taxes.

Portland, Oregon, and Anchorage, Alaska, have no state or local sales taxes.

State law provides property tax savings for those 55 years or older who sell their home and purchase another one of equal or lesser value. Additionally, there are State sponsored property tax relief programs available to help senior citizens on limited income, legally blind and disabled.

Which state has lowest property tax for seniors? ›

Which Are the Tax-Free States? As of 2022, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the only states that do not levy a state income tax. Note that Washington does levy a state capital gains tax on certain high earners.

Kansas, Florida, Iowa, and Texas provide an unlimited dollar value homestead exemption. Florida and Texas, in fact, are well known as debtor-friendly states because of their homestead exemptions.

In 2020, the average American contributed 8.9% percent of their income in state taxes. Alaska had the lowest average overall tax burden – measured as total individual taxes paid divided by total personal income – at 5.4%, followed by Tennessee (6.3%), New Hampshire (6.4%), Wyoming (6.6%) and Florida (6.7%).

Certain property tax benefits are available to persons 65 or older in Florida. Eligibility for property tax exemptions depends on certain requirements. Information is available from the property appraiser's office in the county where the applicant owns a homestead or other property.

Florida does not have a state property tax. Only the county governments levy a property tax, which make up the majority of the county budgets. The average annual property tax rate is 0.86% for homeowners, which makes Florida's property tax rates the 25th lowest in the nation.

Texas. The Texas Constitution forbids personal income taxes. Instead of collecting income taxes, Texas relies on high sales and use taxes. When paired with local taxes, total sales taxes in some jurisdictions are as high as 8.25%.

If you own property as an individual or a business, you are required to pay Tennessee property tax. Even if the property was given to you through an estate or you own a rental property, you will still be held accountable for paying Tennessee property taxes.

All property in Georgia is taxed at an assessment rate of 40% of its full market value. Exemptions, such as a homestead exemption, reduce the taxable value of your property.

According to the Census Bureau, Florida ranks as one of the top states for retirement migration. One of the reasons for this is the state's tax-friendly policies, including no state income tax. Texas also has no state income tax, making it an attractive option for retirees looking to maximize their retirement income.

Which state is cheaper to live in Texas or Florida? ›

Not only is Texas 8% cheaper than Florida overall, but housing, utilities and groceries all cost significantly less in the Lone Star State. (Utility costs in the two states are about equal.) Overall, living in Texas is more affordable than living in Florida.

The City of Stafford holds the unique distinction of being the largest city in Texas to abolish city property taxes. This includes both commercial and residential properties. In addition to a lack of city property taxes, the State of Texas has no state property taxes.

Who Does Not Have to Pay Taxes? Generally, you don't have to pay taxes if your income is less than the standard deduction, you have a certain number of dependents, working abroad and are below the required thresholds, or are a qualifying non-profit organization.

Forty-seven percent of Americans don't pay taxes.

The most pernicious misconception about people who don't pay federal income taxes is that they don't pay any taxes. That oft-heard claim ignores all the other taxes Americans encounter in their daily lives.

The cost of living index and median housing prices are lower in Texas than in Arizona, but that also depends on the neighborhood you are in.

What is the Florida Property Tax Rate? Florida's average real property tax rate is 0.98%, which is slightly lower than the U.S. average of 1.08%. The average Florida homeowner pays $1,752 each year in real property taxes, although that amount varies between counties.

Winner: Florida

Florida levies no income tax, making it the clear winner over Arizona. Arizona's income tax rate runs between 2.59% and 4.50%, and this unfortunately includes retirement income.

A major reason Hawaii has low property taxes is that it offers generous exemptions on owner-occupied residences. Homeowners are eligible for exemptions ranging from $80,000 to $160,000, depending on their county of residence.

For the 2022 tax year, 11 states tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont. All other states and the District of Columbia do not tax the payments.

With no state income tax — the state constitution forbids it — Florida's state government generates the bulk of general revenue (75% to 80% depending on the year) from sales tax collections. It gets the rest from a variety of sources, including documentary stamp taxes, insurance taxes and corporate income taxes.

Is it better to live in a state with no income tax? ›

States that have no income tax aren't excessively wealthy and benevolent. They simply have a different structure for raising revenue. With no income tax dollars coming in, these states must get that revenue from other sources. Typically, this translates to higher sales taxes, property taxes and/or gasoline taxes.

Both were reported in the 2021 American Community Survey (ACS), the most recently data available. We used the five-year estimates to maximize accuracy. As an example, the median real estate tax paid in the United States overall was $2,971, while the median home value was $268,800.

Texas Property Taxes

Property taxes in Texas are the seventh-highest in the U.S., as the average effective property tax rate in the Lone Star State is 1.60%. Compare that to the national average, which currently stands at 0.99%. The typical Texas homeowner pays $3,797 annually in property taxes.

All of the data below comes from the Census Bureau's 2021 1-year American Community Survey (ACS) Estimates. Hawaii has the lowest property tax rate in the U.S. at 0.27%. The Aloha state has a home median value of $722,500.

Unfortunately, there are no states without a property tax. Property taxes remain a significant contributor to overall state income. Tax funds are used to operate and maintain essential government services like law enforcement, infrastructure, education, transportation, parks, water and sewer service improvements.

1. Hawaii. Hawaii residents enjoy the lowest property tax rate in the U.S. However, the high cost of living and limited housing opportunities make it a very expensive place to live.

In 2020, the average American contributed 8.9% percent of their income in state taxes. Alaska had the lowest average overall tax burden – measured as total individual taxes paid divided by total personal income – at 5.4%, followed by Tennessee (6.3%), New Hampshire (6.4%), Wyoming (6.6%) and Florida (6.7%).

What Are the Average Property Tax Rates in Florida? According to the Tax Foundation, Florida ranks No. 26 when it comes to property taxes paid as a percentage of housing value, with an effective property tax rate of 0.91%.

Does Florida have property tax? ›

Ad Valorem (Property) Tax

If you own property in Florida, that property is assessed annually by the county property appraiser. This assessment determines the amount of ad valorem taxes owed each year on your property. Ad valorem or property taxes are collected annually by the county tax collector.

The City of Stafford holds the unique distinction of being the largest city in Texas to abolish city property taxes. This includes both commercial and residential properties. In addition to a lack of city property taxes, the State of Texas has no state property taxes.

Honolulu had the lowest effective property tax rate in 2022.

Countries With No Property Tax: Monaco

Monaco is yet another tax haven based on its tax policies, and it does not levy taxes on individual income, capital gains, as well as net wealth.

1. Alaska. Alaska is the most tax-friendly state for retirees because it has no state income tax or tax on Social Security. And its sales tax rate is the fourth lowest on our list - fifth lowest in the U.S. But keep this in mind: The cost of living in Alaska is higher than in most states.

Fortunately, there are some states that don't charge taxes on retirement income of any kind: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.