Homeowners Face Rising Property Taxes: State-Wise Breakdown Revealed

Rising Property Taxes: Owning a home costs much more than just the monthly mortgage. Homeowners must also pay property taxes, which support local services such as schools, police, fire departments, and road maintenance. These taxes add thousands of dollars every year to household budgets. Depending on where you live, property taxes can be so high that they equal several mortgage payments.

Recent data shows that homeowners are paying 27.4% more in property taxes than they did in 2019, according to CoreLogic’s 2024 report. This increase has surprised many homeowners. A survey by Ownwell found that 67% of homeowners said their property tax bills were higher than they expected, reported CNBC. Younger homeowners, especially Gen Z, often underestimate these costs. Rising property taxes are making it harder for families to plan ahead and save money.

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Differences Between States?

Property tax bills vary a lot across the US. In New Jersey, homeowners pay the highest median annual property tax, around $9,163, while in Alabama, the average is only $786. States like New Jersey and Illinois charge almost eight times more than Hawaii or Alabama.

The effective property tax rate, which is the percentage of your home’s value you pay annually, also differs widely. New Jersey has the highest effective rate at 2.08%. That means on a $400,000 house, homeowners pay more than $8,300 every year. Illinois, New Hampshire, and Connecticut also have high rates. On the other hand, Hawaii has the lowest rate, only 0.26%, which equals about $1,000 on a $400,000 home. Alabama, Arizona, and South Carolina also charge below the national average, which is around 0.9%.

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Why Property Taxes Differ?

The differences in property taxes come from local budgets, population needs, and state policies. Higher taxes often fund better schools and public services, but they also increase the cost of living and riising property taxes can strain family finances, especially when taxes go up faster than income.

How They Affect Homeowners?

Experts say homeowners should not underestimate taxes when buying a house. Real estate agents recommend checking past tax bills, understanding if the town’s tax base is growing, and knowing the schedule for reassessments. Leo Pond, a real estate agent in Vermont, says, “Property taxes are often one of the most underestimated costs of homeownership.” He advises budgeting an extra 5% to 10% on top of estimated taxes to avoid surprises.