Property taxes can vary by nearly $8,000 for a house of the same value. But New Jersey’s tax rate is 2.23%, the highest in the country according to an analysis by the Tax Foundation based on the latest data from the Census Bureau.
Hawaii is the state with the lowest taxation, with a rate of 0.32%.
For a house valued at $416,100, the national average, homeowners in New Jersey pay $9,279 in property taxes. In Hawaii, the tax for a house of the same value is only $1,332.
The average effective property tax rate for all states and the District of Columbia is 0.91%. Only New Jersey and Illinois have property taxes exceeding 2%.
In New Jersey, public services, especially education, are locally controlled and are primarily funded through property taxes. Similarly, in Illinois – which has more local government units than any other state – most of these taxes go towards education and public employee pensions.
In contrast, the government of Hawaii is more centralized at the state level and relies more on tourism than on property taxes to fund public services. As a result, property taxes are the lowest in the country.
However, even with low property taxes, Hawaii is still the most expensive state to buy a house, according to a recent study by LendingTree.
The Highest Property Tax Rates:
• New Jersey – 2.23%
• Illinois – 2.08%
• New Hampshire – 1.93%
• Vermont – 1.83%
• Connecticut – 1.79%
• Texas – 1.68%
• Nebraska – 1.63%
• Wisconsin – 1.61%
• Ohio – 1.59%
• Iowa – 1.52%
The Lowest Property Tax Rates:
• Hawaii – 0.32%
• Alabama – 0.4%
• Colorado – 0.55%
• Louisiana – 0.56%
• Wyoming – 0.56%
• S. Carolina – 0.57%
• Utah – 0.57%
• W Virginia – 0.57%
• Nevada – 0.59%
• Delaware – 0.61%
Source: Tax Foundation based on 2021 data from the U.S. Census Bureau