Want to avoid paying a fortune in property taxes? Don’t buy a home in New Jersey. There, we said it.
The Northeastern state, home of failed presidential contender/overeager Trump supporter Gov. Chris Christie, has the nation’s highest state real estate taxes of 2016, according to WalletHub. That means residents are paying out a bank account–draining rate of 2.29% of their property values, or $7,335 for those with homes at the state median value of $319,900.
The personal finance website analyzed U.S. Census Bureau data to figure out the real estate tax rates by dividing the median, annual state property tax payments by the median state home prices. But it didn’t take into account county, municipality, or even water jurisdiction taxes in their calculations. Ouch!
“A lot of Northeast states are known for their higher property taxes—and they’re also known for the many great amenities they provide,” such as good schools, says Jill Gonzalez, a WalletHub analyst. “There is a sense you might be getting what you pay for.”
New Jersey is followed by Illinois, at 2.25%, or $3,959 annually for those who live in homes priced at the state’s median value; New Hampshire, at 2.1%, or $4,996; Wisconsin, at 1.97%, or $3,266; and Texas, at 1.93%, or $2,537.
The average homeowner shells out an average $2,127 a year in the taxes each year, according to the website.
“Post-recession, people are absolutely taking tax rates more and more into account,” says Gonzalez. “People are are looking into where their money is going and what they can do about it.”
The state with the (blessedly) lowest real estate taxes is Hawaii, at 0.28%. That translates into a $1,405 annual payment for homes at the state’s median home value of $504,500. Aloha!
Alabama came in second at 0.43%, or $538, and Louisiana was third, at 0.48%, or $672. They were followed by Delaware, at 0.53%, or $1,231, and Washington, DC, at 0.57%, or $2,601.
But prospective buyers shouldn’t hop a plane to Hawaii just yet. The median home value for the state is a whopping $504,500—nearly $185,000 more than the median home price in New Jersey, according to WalletHub.
And New Hampshire’s lower home prices, as well as the no sales or income taxes, can, in some cases, offset higher property taxes.
For example, Kathy Snyder, a Nashua, NH-based real estate broker at Re/Max Properties, has seen many Massachusetts residents cross the border into the Granite State to save a few bucks.
The median home value in New Hampshire is $237,400, compared with Massachusetts’ $329,900, according to WalletHub.
And states with lower property taxes often have higher income or sales taxes. And some states with higher property taxes have lower (or in New Hampshire’s case, no) income or sales taxes. They may also rely on surcharges for gasoline and cigarettes.
“Every state has their own mixture of taxes that they rely on to fund government services, primarily schools,” says Norton Francis, a senior research associate at the Urban-Brookings Tax Policy Center, a think tank.
Many states and municipalities will offer relief to their residents, particularly the elderly, disabled, or very low income.
But there are still plenty of home buyers who aren’t dissuaded by paying high premiums to live in the hottest areas.
“Typically people pay more taxes to have a better school district,” Francis says. But “that increases property values and that tends to increase property taxes.”
[Source:- Realtor]
