In the U.S., local governments charge property tax on real estate, like houses and apartments, based on its assessed value. This value is usually updated annually and then multiplied by the local tax rate to determine the tax amount.
Property taxes are crucial for funding many local government activities, particularly public K-12 schools. In the 2019/2020 school year, public K-12 schools received about $871 billion in funding. Of this amount, state governments provided 47%, local governments 45%, and the federal government only 8%. Significantly, from the local government’s contribution, $318 billion, or 81%, came directly from property taxes.
In addition to real estate property tax, roughly half of the U.S. states charge a personal property tax on vehicles. Furthermore, businesses commonly pay taxes on assets, including computers, furniture, and office equipment.
Overview of property taxes by state
It’s important to note that property taxes are collected by local governments, not state governments. So, it’s not quite accurate to say things like “Virginia has lower property taxes than Florida.” Even within a state, tax rates differ from one jurisdiction to another, and sometimes, even areas within a city or county can have varying rates.
For example, in Virginia, while the average tax rate is 0.81%, my county has a rate of 1.12%. A nearby town, only a mile away, imposes an additional 0.83% on top of the county rate, bringing the total tax rate to 1.95%! However, residing in this town offers the convenience of restaurants and grocery stores within walking distance. Plus, town residents get priority registration for summer programs at the community center over those from other zip codes.
Property values also vary wildly. Even a few miles apart, the cost of housing can differ dramatically between counties, cities, or zip codes.
The table below provides average tax rates and property values. It’s essential to note these are mere averages. In the same state, you might find a modest apartment for a very low price somewhere, while luxury homes go for millions elsewhere. But all in all, a place like West Virginia generally has much lower property prices than California.
Average House Price and Property Tax by State
| State | 州 | 平均税率 | 平均房价 | 平均税额 |
|---|---|---|---|---|
| NJ | New Jersey | 2.49% | $335,600 | $8,356 |
| IL | Illinois | 2.27% | $194,500 | $4,415 |
| NH | New Hampshire | 2.18% | $261,700 | $5,705 |
| CT | Connecticut | 2.14% | $275,400 | $5,894 |
| VT | Vermont | 1.90% | $227,700 | $4,326 |
| WI | Wisconsin | 1.85% | $180,600 | $3,341 |
| TX | Texas | 1.80% | $172,500 | $3,105 |
| NE | Nebraska | 1.73% | $155,800 | $2,695 |
| NY | New York | 1.72% | $313,700 | $5,396 |
| RI | Rhode Island | 1.63% | $261,900 | $4,269 |
| PA | Pennsylvania | 1.58% | $180,200 | $2,847 |
| IA | Iowa | 1.57% | $147,800 | $2,320 |
| OH | Ohio | 1.56% | $145,700 | $2,273 |
| MI | Michigan | 1.54% | $154,900 | $2,385 |
| KS | Kansas | 1.41% | $151,900 | $2,142 |
| ME | Maine | 1.36% | $190,400 | $2,589 |
| SD | South Dakota | 1.31% | $167,100 | $2,189 |
| MA | Massachusetts | 1.23% | $381,600 | $4,694 |
| AK | Alaska | 1.19% | $270,400 | $3,218 |
| MN | Minnesota | 1.12% | $223,900 | $2,508 |
| MD | Maryland | 1.09% | $314,800 | $3,431 |
| ND | North Dakota | 0.98% | $339,000 | $3,322 |
| WA | Washington | 0.98% | $193,900 | $1,900 |
| OR | Oregon | 0.97% | $312,200 | $3,028 |
| MO | Missouri | 0.97% | $157,200 | $1,525 |
| GA | Georgia | 0.92% | $176,000 | $1,619 |
| OK | Oklahoma | 0.90% | $136,800 | $1,231 |
| FL | Florida | 0.89% | $215,300 | $1,916 |
| KY | Kentucky | 0.86% | $141,000 | $1,213 |
| IN | Indiana | 0.85% | $141,700 | $1,204 |
| NC | North Carolina | 0.84% | $172,500 | $1,449 |
| MT | Montana | 0.84% | $230,600 | $1,937 |
| VA | Virginia | 0.82% | $273,100 | $2,239 |
| MS | Mississippi | 0.81% | $119,000 | $964 |
| NM | New Mexico | 0.80% | $171,400 | $1,371 |
| CA | California | 0.76% | $505,000 | $3,838 |
| TN | Tennessee | 0.71% | $167,200 | $1,187 |
| ID | Idaho | 0.69% | $212,300 | $1,465 |
| AZ | Arizona | 0.66% | $225,500 | $1,488 |
| UT | Utah | 0.63% | $279,100 | $1,758 |
| AR | Arkansas | 0.62% | $127,800 | $792 |
| WY | Wyoming | 0.61% | $220,500 | $1,345 |
| NV | Nevada | 0.60% | $267,900 | $1,607 |
| WV | West Virginia | 0.58% | $119,600 | $694 |
| DE | Delaware | 0.57% | $251,100 | $1,431 |
| SC | South Carolina | 0.57% | $162,300 | $925 |
| DC | District of Columbia | 0.56% | $601,500 | $3,368 |
| LA | Louisiana | 0.55% | $163,100 | $897 |
| CO | Colorado | 0.51% | $343,300 | $1,751 |
| AL | Alabama | 0.41% | $142,700 | $585 |
| HI | Hawaii | 0.28% | $615,300 | $1,723 |
Average property tax rate map
- New Jersey has the highest property tax rate, averaging 2.49%. Illinois, New Hampshire, Connecticut, and Vermont follow closely behind.
- Hawaii boasts the lowest average property tax rate at 0.28%, which is roughly 1/10 of New Jersey’s rate. Alabama, Colorado, Louisiana, and Washington DC aren’t too far behind.
Average housing price map
- The states with the highest average housing prices are Hawaii, DC, California, Massachusetts, and Colorado.
- Conversely, the states with the lowest average housing prices are Mississippi, West Virginia, Arkansas, Oklahoma, and Kentucky.
Average annual property tax map
- Some states, like Illinois, might have high tax rates (averaging 2.27%), but the average house price is only around $190,000.
- Other places, like DC, might have low tax rates (averaging 0.56%), but the average house price is over $600,000.
- New Jersey faces the challenge of both high tax rates and high property values, resulting in an average annual property tax of $8,356.
- Alabama benefits from low tax rates and property values, with an average tax bill at a mere $585. Nonetheless, job opportunities are limited in Alabama, and its strongly conservative nature may not appeal to everyone.
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