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Where Property Taxes Are Lowest

An analysis of property taxes by Wallethub found that the state of Hawaii has the lowest real-estate tax rate in the U.S. with an average of $606, a rate that is 8.9 times lower than New Jersey, which ranks as the state with the highest average property tax at a rate of $5,419.

According to the U.S. Census Bureau, the average American household spends $2,471 on property taxes for their homes each year. Considering this figure and the massive amount of debt in America, it’s no surprise that more than $14 billion in property taxes go unpaid each year, according to the National Tax Lien Association.

The study, 2021’s Property Taxes by State, authored by John S. Kiernan, Managing Editor of Wallethub, found that nationwide, Blue States have 31.12% higher real-estate property taxes, averaging $2,722, than Red States, which averaged $2,076.

The top five states with the highest property taxes (annual taxes on a home priced at $217,500) include: New Jersey at an average of $5,419; Illinois at an average rate of $4,942; New Hampshire at an average rate of $4,738; Connecticut at an average rate of $4,658; and Vermont at an average rate of $4,135.

The top five states with the lowest property taxes (annual taxes on a home priced at $217,500) include: Hawaii at an average of $606; Alabama at an average rate of $895; Colorado at an average rate of $1,113; Louisiana at an average rate of $1,187; and the District of Columbia at an average rate of $1,221.

For real-estate property tax rates, WalletHub divided the “median real-estate tax payment” by the “median home price” in each state. WalletHub then used the resulting rates to obtain the dollar amount paid as real-estate tax on a house worth $217,500, the median value for a home in the U.S. as of 2019 according to the Census Bureau.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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