In order to buy a home in NYC, you need to have a salary of $186.1K. But if you take property tax rates into consideration you’ll need wayyyy more than that. According to the U.S. Census Bureau, the average American household spends $2,969 on property taxes for their homes each year–imagine all the pizza that could buy you?!–and we hate to break it to you, but that number is way higher in New York.
Online financial advisory site WalletHub recently released a study showing which states have the highest property tax rates in an effort to give future homebuyers a better understanding of how much they should expect to pay each year. The good news: New York does not have the highest property tax rates in the country! The bad news: the future is still bleak for prospective homebuyers hoping to purchase a home here.
Here’s how New York measured up:
- Effective property tax rate: 1.60%
- State median home value: $403,000
- Annual taxes on state median home value: $6,450
Pretty daunting considering it already takes homebuyers on average 12.45 years just to save a 20% down payment for a home in NYC. Not to mention NY housing is already 3.17x less affordable for millennials and Gen Z to begin with.
And, as it turns out, the grass is not greener for those over in Jersey, which we can’t help but think is a bit ironic considering they’re referred to as The Garden State…but we digress. New Jersey was found to have the highest property tax rate in the country, 2.23%, with the average homeowner paying $9,541 each year based on the state’s median home value of $427,600.
In order to determine the states with the highest property taxes, WalletHub compared all 50 states, along with the District of Columbia, by using U.S. Census Bureau data to determine real-estate property tax rates. Researchers divided the “median real-estate tax payment” by the “median home price” in each state and then used the resulting rates to obtain the dollar amount paid as real-estate tax on a house worth $303,400; the median value for a home in the U.S. as of 2023.
The ten states with the highest property tax rates in the United States are as follows:
1. New Jersey
2. Illinois
3. Connecticut
4. New Hampshire
5. Vermont
6. New York
7. Texas
8. Wisconsin
9. Nebraska
10. Iowa