Property Taxes Run High in Northeast

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Homeowners in the Northeast pay the highest property taxes, according to an analysis of recently-released census data conducted by the Tax Foundation. Conversely, those living in the South pay the lowest taxes on their homes.

New Jersey residents spend the most in taxes on their homes, averaging $6,579 per year on their properties. The Garden State is followed by Connecticut, New Hampshire and New York, where homeowners pay $4,738, $4,636 and $3,755, respectively.

According to the report, the highest property tax bills are usually found in areas with the highest incomes. They also tend to be found in areas that offer more services like trash collection and areas with many government workers, such as school administrators or police officers, that are employed through state funding.

“If you live a state that provides a lot of government services, you have to pay for it,” Kail Padgitt, staff economist for the Tax Foundation, tells MainStreet.

The Tax Foundation, a nonpartisan organization that has monitors fiscal policy, ranked all 50 states based on the highest median property taxes paid by both dollar amount and as a percentage of home value.

The information was obtained from homeowners’ responses to Question #17 in the 2009 American Community Survey. This question referred to the total amount of all real estate taxes on the entire property payable to all taxing jurisdictions, including special assessments, school taxes and county taxes.

States that ended up on the opposite end of comparison pay paltry property taxes. Louisiana homeowners, for example, pay $243 in median real estate taxes.  Alabama ($398), West Virginia ($464), Mississippi ($508) and Arkansas ($532) round out the top five states with the lowest property taxes.

This doesn’t mean, however, that you should consider relocating if you’re looking to lower your taxes.

“Just because you see low property taxes in these areas doesn’t mean that the tax burden on its residents is low,” Padgitt says, explaining that many state government make up for lower property taxes with higher income, sales, fuel or other taxes. Mississippi, for example, carries one of the highest sales tax rates (7%) in the country.

The converse also applies. Padgitt points out that while property taxes in New Hampshire are high, residents don’t pay income or sales taxes. New York and New Jersey residents, however, pay high taxes all around.

The top five states for median real estate taxes as a percentage of median home value were New Jersey (1.89%), New Hampshire (1.86%), Texas (1.81%), Wisconsin (1.76%) and Nebraska (1.76%).

What states are your best bets for low taxes?  Check out this MainStreet article to find out.

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