Property Taxes Can Take a Big Chunk of Your Housing Budget: Here’s Where They’re the Lowest and the Highest MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

The only certain things in life might be death and taxes—but the dollar amount of those taxes is likely to vary greatly depending on where someone lives.

U.S. property tax bills can range from an annual average of a few hundred dollars in Alabama to thousands in New Jersey, according to a new analysis from WalletHub. States, counties, municipalities, and school districts can calculate the taxes differently and charge disparate amounts for similar homes.

“Prospective buyers should definitely take property taxes into consideration when deciding where to move,” says Jill Gonzalez, an analyst with WalletHub. “This is a significant expense and should be accounted for in anyone’s budget when making a decision to relocate.”

As the WalletHub analysis makes clear, there are a lot of factors that go into determining property taxes. For example, Hawaii is the state with the lowest property tax rate, at point twenty nine percent, but it’s also home to the priciest real estate in the nation. For a home at the state’s median price, $662,100, that works out to an annual property tax bill of $1,893, according to WalletHub.

In contrast, New Jersey has far and away the highest property tax rate in the nation, at two point forty seven percent. Even though the median-priced home in the Garden State is about half that of Hawaii, at $355,700, the higher tax rate is still enough to leave New Jersey residents with the highest annual bill in the country, at $8,797.

And it’s not just owners who pay the price for property taxes. Higher property taxes mean higher costs for landlords, who are likely to pass those on to tenants in the form of higher rent. That means states with lower property taxes might also have areas where rentals are more affordable.

Taxes pay for different services around the country. For example, garbage pickup might be included in some taxes, while homeowners in lower-tax areas might have to cover those costs on their own.

The five states with the lowest property tax rates are Hawaii, Alabama, Colorado, Nevada, and Louisiana, WalletHub’s report shows. The highest rates are typically in the Northeast, in New Jersey, Illinois, Connecticut, New Hampshire, and Vermont.

After New Jersey, the states with the highest overall price tag are Connecticut, New Hampshire, New York, and Massachusetts. The lowest annual costs, after Alabama, can be found in West Virginia, Arkansas, Louisiana, and South Carolina.

Because property taxes are so variable, it’s crucial for would-be buyers to be sure they’re getting the right information in order to budget accordingly. Taxes can also jump when a property changes hands, so it’s important to calculate them correctly, Gonzalez notes.

“The best way to confirm you have the right information regarding property taxes is to check local government websites,” she says. “You’ll be able to find information about property value assessments, taxes, and even calculators to estimate how much you’d be paying.”

The post Property Taxes Can Take a Big Chunk of Your Housing Budget: Here’s Where They’re the Lowest and the Highest appeared first on Real Estate News & Insights | realtor.com®.

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