deep in the heart of taxes
Texans pay the 6th highest real estate property taxes in the U.S., new report finds
It’s that time of year again where Texas homeowners grimace at their tax bills. But here’s some consolation – did you know the Lone Star State doesn’t have the highest property tax rate in the U.S.? Personal finance website WalletHub’s 2023 report says there are five states paying higher property taxes than Texas.
In the report, Hawaii comes in first place with the lowest property tax rate out of all 50 states and the District of Columbia – 0.29 percent. With a median home value of $662,100, that means the average Hawaiian is paying $1,893 in annual property taxes.
Toward the bottom of the list (meaning states with the highest property tax rates), Texas sits at No. 46. The median home value in Texas is $202,600 with a property tax rate of 1.74 percent, which means the average Texan pays $3,520 in property taxes.
States paying higher property taxes than Texas are Vermont at 1.90 percent, New Hampshire with 2.09 percent, Connecticut at 2.15 percent, and Illinois with a 2.23 percent tax rate. Coming in at No. 51 with the most expensive property tax rate on the list is New Jersey, sitting at 2.47 percent. At that rate, New Jersey homeowners pay $6,057 on a median home valued at $355,700.
Dr. Alex Combs, assistant professor in the Department of Public Administration and Policy at the University of Georgia, says people should consider how much they could pay in property taxes when making the decision to move.
"After all, people are sensitive to price, and the property tax is a visible cost of homeownership that funds generally desirable government services like education and public safety," he explains. "If they have the opportunity, people are going to seek the biggest benefit for their property tax buck."
The 10 states that pay the lowest real estate property taxes are:
- No. 1: Hawaii – 0.29 percent
- No. 2: Alabama – 0.41 percent
- No. 3: Colorado – 0.51 percent
- No. 4: Nevada – 0.55 percent
- No. 5: South Carolina and Louisiana (Tied) – 0.56 percent
- No. 7: District of Columbia – 0.57 percent
- No. 8: Utah and Delaware (Tied) – 0.58 percent
- No. 10: West Virginia – 0.59 percent
While Texas homeowners will feel the sting of their property taxes, at least they can find some comfort in not having to worry about vehicle property taxes. Texas vehicle owners do have to pay a 6.25 percent tax rate on the purchase price of a car with their local tax assessor-collector, but they do not have to pay annual vehicle property taxes.
Plus, it’s not just Texas – WalletHub determined 23 other states and Washington, D.C., also do not have vehicle property tax rates. Louisiana has the lowest rate out of the remaining states who do pay vehicle property taxes, at 0.10 percent. The state with the highest vehicle property tax rate is Virginia, at 3.96 percent.
The full report and its methodology can be found on WalletHub’s website.