The average American household spends $2,969 on property taxes for real estate each year, according to a recent report from WalletHub. The personal finance website cited U.S. Census Bureau data.
The 35% of renter households also shell out for property taxes, whether directly or indirectly, as these affect both rent charges and the finances of state and local governments, the report said.
“Some states charge no property taxes at all, while others charge an arm and a leg,” WalletHub analyst Chip Lupo said in a statement. “Americans who are considering moving and want to maximize the amount of money they take home should take into account property tax rates, in addition to other financial factors like the overall cost of living, when deciding on a city.”
In order to determine where property taxes are a small inconvenience or a major burden, WalletHub compared the 50 states and the District of Columbia by using U.S. Census Bureau data to determine real estate property tax rates. Researchers divided the median real estate tax payment by the median home price in each state. ThinkAdvisor used this figure for our ranking. So while Hawaii has the lowest effective real estate tax rate, at 0.27%, it would rank 19th on our list due to its high median property values.
WalletHub also used the resulting rates to obtain the dollar amount paid as real estate tax on a house worth $303,400, the median value for a U.S. home as of 2023 according to the Census Bureau.
See the accompanying gallery for the 12 states with the lowest real estate property taxes, as ranked by the tax bill on a median-priced home in each state.
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