Last updated 03/19/2024
Moving into a new home is incredibly exciting, bringing a whirlwind of change. Depending on where you are moving, one of these changes could be your state property taxes. These are taxes you pay on immovable belongings (such as houses and land) to the government.
Each state has a different property tax rate, which is a percentage of your home’s value. Everyone’s annual property tax expense is different and dependent on this rate and their home’s price.
Each state has its own property tax rate, which must be paid to the local or county authority every year.
If you’re interested in which states have the highest and lowest state property tax, you have come to the right place. Here, we will explore the continental states and their state property taxes.
Table of Contents
State Property Tax in the Northeast
Highest: New Jersey
New Jersey is the state with the highest property tax in the nation. The tax rate is an insane 2.23%, and with the average price of a home being $384,700, you can expect to pay an average of $8,597.69 in property taxes yearly if you decide to settle down in New Jersey.
New Jersey is beautiful and rich in natural and man-made history. While expensive, it is still a wonderful place to live. Especially because of its proximity to New York City, which ensures there’s always something to do.
Lowest: Delaware
If you’re looking to stay within the Northeast but want a bit of relief in terms of property tax, look no further than the great state of Delaware. Geographically, Delaware sits just a few hours’ drive south of New Jersey, but the state property tax rates are far different.
The state property tax rate is just 0.61%. The average home costs $337,200, which calculates to an average yearly property tax of $2,067.97.
State Property Tax in the South
Highest: Texas
Some things are bigger in Texas, including The Lone Star State’s property tax rate. Texas has a property tax rate of 1.68%.
Fortunately, the price for a home is on the cheaper side at $284,800, and the average annual property tax is $4,776.81. Although the tax rate is higher in Texas, there is no individual income tax. This fact, combined with the great culture in Texas, makes it a grat state to consider moving to.
Lowest: Alabama
If you are looking to save big on property taxes, Alabama is a great choice. Its property tax rate is 0.40%, and the average home price is just $200,900. You will pay just $803.59 a year on average in property taxes.
Beautiful beaches and thrilling football games make up Alabama’s culture, and there is always something to do. If you are considering moving to the South, Alabama is a great place to consider.
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State Property Tax in the Midwest
Highest: Illinois
States in the Midwest tend to have a bit of a higher rate than the other regions. The highest rate you’ll find here belongs to Illinois at 2.08%. It is the second most expensive property rate in the nation.
Illinois homes will cost an average of a whopping $432,500, leaving property owners paying an average of $9,006.07 for property taxes yearly.
Nevertheless, Illinois has a lot to offer. Chicago resides at the top of the state alongside windy Lake Michigan. South of Chicago, quaint towns surrounded by rolling hills and farmland occupy Illinois’s region.
Lowest: Indiana
Right next door to Illinois is a cheaper option: Indiana! Indiana’s property tax rate in 2024 is 0.84%. With the average price of a home being $251,600 and the average yearly property tax payment of $2,121.46, Indiana’s prices are significantly cheaper than Illinois’.
While the cheapest in the Midwest, Indiana’s property rate is the 22nd cheapest rate in the nation. If you are looking to move to the great plains of the Midwest, Indiana might be a great option for you.
State Property Tax in The West
Highest: Oregon
Oregon has a tax rate of 0.93%. With an average home cost and yearly property tax of $191,700 and $1,786.74, respectively, moving to Oregon’s rocky shores would be no cheap endeavor.
The Pacific Coast is beautiful but expensive. Though much cheaper than Oregon, Washington and California also have high property tax rates. So, if you are considering moving to the West, you might want to stay out of the Pacific region.
Lowest: Colorado
Colorado, known for its breathtaking natural landscapes, also boasts the third lowest property tax rate in the nation. At 0.55%, Colorado offers its inhabitants an average home price of $531,100 and an annual tax of $2,901.65.
Although Colorado does not sit on the Pacific Coast, it is a great option. Colorado is known for its beautiful mountains and valleys, many National Parks, and interesting wildlife. It would be a wonderful place to live!
Making Your Decision
While some places have high property taxes, these taxes are essential for funding services. Public schools, local police, fire departments, and libraries all rely on property owners and their taxes. Oftentimes, the more money given to these services, the better they will be.
When making your decision, research the cost of your expenses and where that money will go. Everyone’s priorities are different, so ask yourself what’s worth the cost of your property taxes to you.
When moving to a new place (especially moving out of state), there is much to consider other than property taxes. Location, annual income, cost of living, and other moving expenses are all factors in your decision.
Conclusion
Property tax rates vary depending on the state you live in. When moving, it is imperative to research how much that state’s property tax rate is and what services that money fuels.
The Northeast houses the highest property tax rate with New Jersey. However, Delaware is a great alternative and much cheaper.
The South is slightly cheaper. Texas has the most expensive property tax while Alabama has the least.
The Midwest is fairly expensive, with Illinois having the second-highest property tax in the nation. Indiana has the cheapest property tax in the Midwest, but it is still far from the cheapest in the United States.
Oregon has the West’s most expensive state property tax, while Colorado has the lowest. States bordering the Pacific Ocean have higher overall tax rates.
While property taxes can be a frustrating and costly expense, they are essential to the well-being of communities nationwide. Don’t just look for the cheapest option; find the community that works best for you!
FAQs
Property taxes are local and state taxes on immovable objects, such as land, houses, offices, buildings, and barns. They are calculated using the state’s property tax rate (which is a percentage) and the property’s value.
Local schools receive the majority of the community’s property taxes, but libraries, roads, and police also receive income from those taxes. Property taxes are a major source of revenue for these services, as 30% of total state and local tax collections come from property taxes.
Yes. Tangible personal property taxes are taxes on items such as automobiles, machinery, business inventory, and furniture. They are complex and have a negative impact on economic growth, but 43 states have tangible personal property taxes, affecting businesses nationwide.
John is a recent graduate from the University of Colorado where he received a B.A in History and minor in Economics. He currently lives in Spain, but originally hails from New York. In his free time he enjoys running and following his hometown NY sports teams.
Caroline is an undergraduate at the University of Iowa studying Business Management and English Publishing. When she's not studying, she spends time reading, hanging out with friends, working out, traveling, and calling her family. After college, Caroline will enter the publishing industry, where she will help authors and their stories find their perfect audience.
