5 States with the Highest and Lowest Property Taxes

November 2, 2016
Joe Hannan

If selling your house and moving is a part of your retirement plan, you will want to factor in your property tax burden at your desired location.

Are you contemplating your retirement? Where is just as an important question to ask yourself as when. Somewhere lurking in your blissful dream of a retirement paradise could be the nasty nightmare of a bank-breaking property tax bill. After all, paradise can be expensive.

As your permanent departure from the workforce nears--and you are considering the sale of your practice while confronted daily by the cavernousness of your empty nest--you might be contemplating relocation as part of your retirement strategy. It behooves you to weigh your options and scout locations well in advance.

Regardless of where you end up, if current trends prevail, property taxes will continue their upward creep nationwide. The latest tax data from the US Census Bureau shows a clear upward trend in state and local property tax revenue, collected from 2006 to present. So, in addition to life’s certainties of death and taxes, you can also likely include higher taxes.

There are surprises lurking in this most recent Census Bureau data. The Census breaks the country into four regions: Northeast, Midwest, West, and South. By percentage of total tax revenue (state and national), property taxes comprise the largest piece of the tax-revenue pie in the Midwest, at 29.1%. In the South, it’s even higher at 40%. This is worth noting because the South and Midwest are typically thought of as havens of low property taxes. This could indeed be the case, since this is a look at total revenue by percentage, however, it is a factor worth considering, given prevailing property tax trends.

According to a recent WalletHub report, in 2016, the average American about $2,000 on property taxes annually. WalletHub points out that if you think you’re going to escape the tax burden during retirement by renting, think again. The tax crunch will just get passed along to you in the form of higher rent.

Since there’s no escaping the tax man, it’s best to weigh your location options. WalletHub analyzed and ranked states according to their tax burdens, factoring in the added cost of vehicle property taxes. Here is how the states, and the District of Columbia, rank, according to their current tax rates.

Top 5 States with the Lowest Property Tax Burdens

1. Hawaii:

Effective Real-Estate Tax Rate: .28%

Annual Taxes on $176K Home: $489

State Median Home Value: $504,500

Annual Taxes on Home Priced at State Median Value: $1,405

2. Alabama

Effective Real-Estate Tax Rate: .43%

Annual Taxes on $176K Home: $764

State Median Home Value: $123,800

Annual Taxes on Home Priced at State Median Value: $538

3. Louisiana

Effective Real-Estate Tax Rate: .48%

Annual Taxes on $176K Home: $841

State Median Home Value: $140,400

Annual Taxes on Home Priced at State Median Value: $672

4. Delaware

Effective Real-Estate Tax Rate: .53%

Annual Taxes on $176K Home: $929

State Median Home Value: $232,900

Annual Taxes on Home Priced at State Median Value: $1,231

5. District of Columbia

Effective Real-Estate Tax Rate: .57%

Annual Taxes on $176K Home: $1,005

State Median Home Value: $454,500

Annual Taxes on Home Priced at State Median Value: $2,601

5. South Carolina (Tied)

Effective Real-Estate Tax Rate: .57%

Annual Taxes on $176K Home: $1,009

State Median Home Value: $137,600

Annual Taxes on Home Priced at State Median Value: $790

Top 5 States with the Highest Property Tax Burdens

Effective Real-Estate Tax Rate: 1.93%

Annual Taxes on $176K Home: $3,392

State Median Home Value: $131,400

Annual Taxes on Home Priced at State Median Value: $2,537

2. Wisconsin:

Effective Real-Estate Tax Rate: 1.97%

Annual Taxes on $176K Home: $3,459

State Median Home Value: $165,900

Annual Taxes on Home Priced at State Median Value: $3,266

3. New Hampshire:

Effective Real-Estate Tax Rate: 2.10%

Annual Taxes on $176K Home: $3,698

State Median Home Value: $237,400

Annual Taxes on Home Priced at State Median Value: $4,996

4. Illinois:

Effective Real-Estate Tax Rate: 2.25%

Annual Taxes on $176K Home: $3,959

State Median Home Value: $175,700

Annual Taxes on Home Priced at State Median Value: $3,959

5. New Jersey:

Effective Real-Estate Tax Rate: 2.29%

Annual Taxes on $176K Home: $4,029

State Median Home Value: $319,900

Annual Taxes on Home Priced at State Median Value: $7,335

Source: WalletHub