Property taxes fund schools, the police, and all the municipal services your community provides. When a pothole is filled on your street, your property taxes are paying for it. Trash pickup is paid for (in most cases) by your property taxes.
According to the Urban Institute, state and local governments received a total of $577 billion in property taxes in 2019, representing 17% of general revenue collected. The Institute notes, however, local governments are more reliant on property taxes than state governments. In 2019, states collected $18 billion, or 1%, from property taxes. Local governments took in $559 billion, or 30%, for local general revenue from property taxes. (How does the U.S. fare in collecting taxes? See the countries collecting the most taxes.)
Each state levies property taxes differently, which is why tax rates vary widely by state. To determine the states with the highest and lowest property taxes, 24/7 Wall St. reviewed data on property tax collections and home value from the Tax Foundation’s Facts & Figures 2022 report. States were ranked based on real property taxes paid as a percentage of the total value of all owner-occupied housing in 2020. Data on state and local property tax collections per capita is for fiscal 2019 and is from the Tax Foundation. Supplemental data on median home value and median household income are from the U.S. Census Bureau’s 2020 American Community Survey and are five-year estimates.
Click here to see the states with the highest and lowest property taxes
The Tax Foundation estimates that the per capita property tax collected across the U.S. for 2019 came to $1,758. To give you an idea of how state property taxes diverge state by state, look at the highest property taxes versus the lowest in the top and bottom states. In New Jersey, the per capita property tax reached $3,513. Alabama residents paid $620. (As with property taxes, state income tax rates vary widely, too. These are the states collecting the most income tax per person.)
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