Property taxes vary across the country, but living in a state where property owners pay the highest average property taxes doesn’t necessarily mean that living in that state is unaffordable. There are a variety of other factors that can influence the overall cost of living in a particular region, and property taxes are just one of those factors.
According to the U.S. Census Bureau, the average household in America spends $2,127 each year on property taxes. However, states that also require property taxes to be paid on vehicles end up paying more than $400 each year in additional costs related to taxes. Unfortunately, more than $11 billion in owed property taxes each year aren’t paid, which means there are millions of homeowners out there paying extra fees and penalties because of their property tax bills.
States with High Property Taxes Across the Nation
The highest property tax rates in the country are paid by residents in New Jersey, Illinois, and New Hampshire. Those states all require residents to pay a real estate tax rate that’s greater than 2%. Rounding out the top six highest tax rates are Wisconsin, Texas, and Connecticut, which all require property taxes paid of at least 1.9%.
States with the lowest tax rates in the nation include Hawaii, Alabama, and Louisiana. Each of these states has a tax rate on the books of less than a half percent. Other states with low real estate taxes include Delaware, the District of Columbia, and South Carolina. However, it’s not just the effective real estate tax rate that may impact the overall amount of taxes one might need to pay, on average, in a particular state.
For example, residents in Alabama have a low real estate tax rate, as well as a low median home value for the state, so the annual taxes for residents aren’t much more than $500, on average. On the other hand, the high median home values in New Jersey and the state’s high real estate taxes mean that residents pay an astounding $7,335 on average for annual property taxes.
Factors that Influence Affordability for Homeowners
Property taxes may be one of the largest, if not the largest, taxes a family, business owner, or individual pays each year (other than federal income taxes), but they’re not the only taxes that may prove to be difficult to handle if you’re not prepared to pay them.
In addition to property taxes, some states require that residents pay state income taxes, taxes on other types of property (like vehicles), and sales taxes. A state that has high property taxes but doesn’t charge residents income tax or sales tax might actually be considered more affordable than a state with low property taxes and a high sales tax.
When trying to decide whether a particular property is a good investment and an affordable one, looking at the local costs for goods and services, as well as the different types of taxes charged by the state can help paint the most accurate picture.
Property Tax Questions in Dallas, Texas? Rely on Hegwood Group
Working with a property tax consultant from Hegwood Group may reduce the overall tax burden a property owner may have to pay, or it might be possible to reduce the penalties or fees associated with late payment of property taxes. It’s essential for all property owners to pay property taxes on time, but sometimes there are issues that prevent timely payment.
The lawyers and property tax consultants of Hegwood Group can help in a variety of ways from assisting with property tax appeals to providing legal representation for property tax issues. Get in touch today to learn more.