Americans pay taxes to several government agencies. In most states, this includes money paid to the Internal Revenue Service, money collected by the state, and often sales taxes. A few states are considered state tax havens. Florida is one of these because residents pay no state tax at all.
People also pay property taxes. These generally involve an assessment of a person’s home and land. These figures are often below the market value of the home and property when sold. These values may not change for years.
According to the Urban Institute, state and local governments received a total of $577 billion in property taxes in 2019, representing 17% of general revenue collected. The institute notes that local governments are more reliant on property taxes than state governments. In 2019, states collected $18 billion, or 1%, from property taxes. Local governments took in $559 billion, or 30%, for local general revenue from property taxes.
Because each state levies property taxes differently, the tax rates vary widely. To determine the state with the highest property taxes, 24/7 Wall St. reviewed data on property tax collections and home value from the Tax Foundation’s Facts & Figures 2022 report. States were ranked based on real property taxes paid as a percentage of the total value of all owner-occupied housing in 2020. Data on state and local property tax collections per capita is for fiscal 2019 and is from the Tax Foundation. Supplemental data on median home value and median household income are from the U.S. Census Bureau’s 2020 American Community Survey and are five-year estimates.
The Tax Foundation estimates that the per capita property tax collected across the United States for 2019 came to $1,758. To give you an idea of how state property taxes diverge state by state, look at the highest property taxes (New Jersey’s $3,513) versus (Alabama at $620).
These are the New Jersey numbers:
- Effective property tax rate: 2.21%
- Median home value: $343,500 (sixth highest)
- Property tax collections per capita: $3,513 (the highest)
- Median household income: $85,245 (second highest)
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