These States Getting Hit Hardest By Rising Property Taxes!
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Property and taxes: these two words are enough to make any homeowner break into a sweat. They fund vital community services like schools, roads and emergency services, but they’re also a growing financial burden for many. Given that the real estate market is on a roller coaster these days, property tax bills have skyrocketed in many states, forcing homeowners to dig deeper into their pockets. What makes it worse is the uneven distribution.
If you’re a first time buyer or a seasoned homeowner, it’s important to understand the ever changing tide of property taxes. So let’s dig a little deeper into the states that have been hit hardest by this trend and why these increases are giving folks so much heartburn.
New Jersey
When it comes to property taxes — and not in a good way — New Jersey often leads the charge. According to Business Insider, New Jersey homeowners pay sky high bills year after year with an average effective property tax rate of 2.21 percent, the highest in the country. The first reason is that the state is dense, and has made large investments in public services such as education and infrastructure.
Illinois
Property taxes in Illinois average about 2.05%. Local governments here have long relied on property taxes to fund everything from schools to public safety, and residents have carried some of the steepest tax burdens in the U.S. Illinois homeowners feel the pinch like never before, with no immediate solution in sight.
Connecticut
You pay an average property tax rate of 2.14 percent for picturesque towns and scenic views in Connecticut. Public services and local government have consistently been very expensive in this state, making this one of the most expensive for homeowners. For instance, Fairfield County, where the wealthy tend to live, has some of the nation’s highest property tax bills. Connecticut residents may love their well funded schools and clean streets, but they can’t deny the financial strain these taxes place on them.
Texas
Property tax bills are bigger in Texas, and everything else. Though there’s no income tax in the Lone Star State, it makes up for it with property taxes at 1.8%. What fuels these high rates? Basically, it is the rapid growth of the housing market and the need for more public services in fast growing cities like Austin and Dallas. According to Tax Foundation, Texas ranks high in the nation in terms of total property tax revenue collected as it relies heavily on property tax revenue.
New Hampshire
While New Hampshire has no state income tax, it’s a double edged sword. Property taxes are a major revenue stream used to balance the budget and they average 1.96%. That means the state emphasizes local control, and towns and cities set their own rates — which can often lead to higher bills for residents. In areas such as Hanover and Portsmouth, where housing costs are steep and tax bills are large, homeownership is a tough dream to realize.
Wisconsin
Wisconsin’s rolling hills and charming towns come with a catch: average property tax rates of 1.85%. Although the state provides homestead credits and relief programs, the burden of tax is still big for the middle class families. While residents generally support using much of the revenue to fund public education, the annual bill itself doesn’t make the blow any softer. Over the past decade, it’s steadily crept up.
New York
Property taxes aren’t cheap to live in New York. The Empire State is one of the most expensive places to own a home with an average rate of 1.72%. While New York City’s sky high housing costs tend to garner a lot of attention, many upstate homeowners are dealing with hefty property taxes that eat into their budgets. The overreliance on property taxes to fund schools — among the best funded in the country — is a contributing factor.
Vermont
Property tax rate in Vermont is usually around 1.81%. A big part of that is due to the state’s unique education funding system, where local school budgets are funded by property taxes, and property taxes also pay for statewide school budgets. Residents benefit from well maintained public services and beautiful communities, but the cost of these taxes can be high and take a heavy toll on retirees and low income families.
Nebraska
Property taxes in Nebraska average 1.77 percent, thanks to the state’s heavy reliance on local revenue. Especially steep tax bills are faced by agricultural communities in particular, who pay higher taxes on farmland than other states. Agricultural land property taxes have risen over the past 20 years, squeezing farmers and straining them with increasing operational costs.
Rhode Island
Rhode Island may be the smallest state, but when it comes to property taxes, don’t think small. The average rate for homeowners is 1.63 percent, with Providence bearing the brunt of the pain. The burden is made higher due to high property values, which also need to fund schools and public safety. Although local governments have tried to introduce relief programs, the tax structure overall is an issue for many families.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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