Your monthly mortgage payment isn’t the only expense to consider when you own a home. Your budget should also include—at the least—insurance, utilities, maintenance, and property taxes, all of which can add up to a hefty sum and make homeownership a little less affordable.
HomeAdvisor, a home services site, analyzed data from the US Census Bureau to determine the property tax rate in each state, as well as the median property tax payment and the percentage of household income that goes toward property taxes. Here are the US states where homeowners pay the highest and lowest property tax rates.
Top 10 states with the highest property tax rates
These are the states with the highest property tax rates, some of which also top the list of highest annual tax payments. New Jersey residents pay significantly more ($8, 488 per year) than those in any other state.
New Jersey: 2.47%
Illinois: 2.24%
Connecticut: 2.13%
New Hampshire: 2.13%
Vermont:1.90%
Wisconsin: 1.78%
Texas: 1.75%
New York: 1.72%
Nebraska: 1.68%
Rhode Island: 1.57%
Top 10 states with the lowest property tax rates
Hawaii: 0.28%
Alabama: 0.41%
Colorado: 0.51%
Louisiana: 0.55%
District of Columbia: 0.56%
South Carolina: 0.57%
Delaware: 0.57%
Nevada: 0.57%
West Virginia: 0.58%
Utah: 0.60%
How much do you need to budget for property taxes?
It probably isn’t surprising that the states with the highest property tax rates are largely the same as those where homeowners put more of their budgets toward property tax bills. In New Jersey, that amounts to 9.96% ($8,488) of household income. New York, Connecticut, New Hampshire, and Vermont also fall in the top five.
On the flip side, households in Alabama put the lowest percentage of income (1.17%, or $608) toward property taxes. West Virginia, Arkansas, South Carolina, and Louisiana residents also make that list.
Where are property taxes expected to increase the most?
HomeAdvisor also used data from the Federal Housing Finance Agency to determine where property taxes are expected to rise the most in the next five years. Idaho tops the list, with a predicted increase somewhere between 120.0% and 139.9%. Utah residents may also see a huge jump—somewhere in the 100.0%–119.9% range. (Note that property taxes in both Idaho and Utah are currently relatively low.)
Arizona, Florida, Montana, Nevada, Tennessee, and Washington are predicted to see major increases in the 80.0%–99.9% range. If you live in or are planning to move to Alaska, Delaware, Hawaii, Illinois, Louisiana, North Dakota, or West Virginia, you might expect the lowest property tax increase in the next five years (20.0%–39.9%).