Mickey Neuberger Chief Marketing Officer | realtors.com
Homeowners across the United States are experiencing significant financial pressure due to property taxes. These taxes, calculated based on the value of a home and its land, represent a major revenue source for state and local governments. As tax season approaches, many homeowners are preparing to make substantial payments.
The tax rate varies by location, influenced by municipal needs such as funding for public services. This variability impacts decisions when purchasing homes. Joel Berner, senior economist with Realtor.com, highlights that "both states are middle of the pack when it comes to affordability before taxes, with Texas ranking #20 and New Jersey ranking #28," noting that "the high property tax burdens in these states make affordability even more of a challenge."
New Jersey leads the list of states with the highest property tax rates at 2.46% for 2024. Median home values stand at $531,559 with median taxes paid at $9,137. Counties like Bergen, Essex, and Morris report particularly high taxes.
Illinois follows with an average rate of 2.29%, where Peoria and Rockford have notably high property taxes. Connecticut ranks third at 2.16%, facing some of the largest increases over the past decade in areas like Bridgeport and Stamford.
New Hampshire is fourth with an average rate of 2.09%. Despite its small population, demand for homes remains strong amidst low inventory levels.
Texas rounds out the top five with a rate of 1.90%. High property taxes are a significant concern for residents; a University of Houston survey found that over half want budget surpluses directed toward relief efforts.
Governor Greg Abbott has labeled property tax cuts as an "emergency item," but legislative action is necessary to address this issue.
Property assessments determine tax amounts owed annually, although exemptions exist for certain groups such as veterans or seniors. Homeowners can contest their assessments but reductions aren't guaranteed.
Greg McBride advises timely payment: "In addition to avoiding late fees, you may find there is a discount for paying property taxes early." Late payments could lead to serious consequences including liens or foreclosure risks.
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