Economy Watch: Where Do Residents Pay the Most Property Tax?

A new report from WalletHub reveals which states have the highest and lowest property tax in 2018.

By D.C. Stribling, Contributing Editor

Source: WalletHub

New Jersey is the state with the highest residential property taxes, according to a new report by WalletHub. The effective Garden State property tax rate is 2.4 percent, meaning that a $185,000 property is levyed a tax of $4,437 a year. The median value for residential property in New Jersey is $316,400, and the annual tax on that would be just over $7,600.

Next on the list of top 10 high property tax states is Illinois, followed by New Hampshire, Connecticut, Wisconsin, Texas, Nebraska, Vermont, Michigan and a tie between New York and Rhode Island.

At the other end of the property tax spectrum, Hawaii has the lowest, with an effective rate of 0.27 percent. Median residential values are high in that state ($538,400), but even so the Hawaiian property tax on that amount would only be $1,459. The next lowest states were Alabama, Louisiana, Delaware, D.C., South Carolina, Colorado, West Virginia and Wyoming.

The average American household spends $2,197 on property taxes for their place of residence each year, according to the U.S. Census Bureau. Residents of the 27 states with vehicle property taxes pay another $436.

For real estate property tax rates, WalletHub divided the “median real estate tax payment” by the “median home price” in each state. The company then used the resulting rates to obtain the dollar amount paid as real estate tax on a house worth $184,700, the median value for a home in the U.S. as of 2016 according to the Census Bureau.