Tags: Property | Tax | Hawaii | New Jersey
OPINION

Lowest Property Tax Is Hawaii and the Highest Is New Jersey

Lowest Property Tax Is Hawaii and the Highest Is New Jersey
(Dollar Photo Club)

Juliette Fairley By Thursday, 17 March 2016 06:08 AM EDT Current | Bio | Archive


The average American household spends $2,089 on real estate property taxes each year and residents of the 27 states with vehicle property taxes shell out another $423, according to the National Tax Lien Association.

However, some states cost more than others when it comes to the American Dream and its staples of a house and car.

“Different parts of the country have different levels of taxation and amenities paid for by the tax receipts,” said David Reiss, professor of law and research director with the Center for Urban Business Entrepreneurship at Brooklyn Law School.

The state with the lowest real estate property taxes is Hawaii where residents pay only $482 per household, which is the least average amount typically shelled out by a taxpayer, according to a 2016 WalletHub study, ranking states with the highest and lowest property taxes.

“High property taxes tend to be correlated with high income and high income tends to be correlated with Blue States, so it is not surprising that high property taxes are correlated with Blue States,” Reiss said.

Red states are typically Republican while Blue states are generally known as Democratic.

At $3,971 per household, New Jersey residents pay the most followed by Illinois at $3,939 and $3,649 in New Hampshire, according to WalletHub. Other high property tax states include Wisconsin, Texas and Connecticut.

“Real estate taxes in New Jersey are higher than in Hawaii for several different reasons,” said Jill Gonzalez, spokesperson with WalletHub. “The most notable would be how much of each state's total state revenue relies on each separate kind of tax.”

In New Jersey, a Blue state, about 37% of state revenues is derived from property taxes while only some 17% comes from sales and excise taxes.

In Hawaii, also a Blue state, those numbers are reversed with less than 13% of total state revenue stemming from property taxes and nearly 40% from sales & excise taxes. It’s all for a good cause however.

“Local property taxes can help pay for all sorts of municipal services, including schools, road maintenance and emergency services,” Reiss said

Alabama, Louisiana and Delaware, D.C. and South Carolina follow Hawaii among the states with the lowest property taxes.

High tax localities, such as Westchester County in New York, could have annual taxes that easily are in the tens of thousands of dollars a year range but such areas also have some of the best schools in the nation.

The WalletHub report further found that in Blue states, real estate property taxes are 39% higher at $2,250 a year than homeowners in Red states who pay $1,613.

The yearly burden weighs far more heavily on taxpayers in some states than in others based on region.

For example, communities in the Northeast typically have higher property taxes than many of those in the rest of the country.

“Monthly mortgage payments are usually much higher than monthly real property tax payments, measuring in the high hundreds in low-cost metros like Pittsburgh to the thousands in a high-cost metro like San Francisco so it is hard to put default rates squarely on the shoulders of real property taxes,” said Reiss.

Juliette Fairley is an author, lecturer and TV host based in New York. To read more of her work, Click Here Now.

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JulietteFairley
The average American household spends $2,089 on real estate property taxes each year and residents of the 27 states with vehicle property taxes shell out another $423, according to the National Tax Lien Association.
Property, Tax, Hawaii, New Jersey
545
2016-08-17
Thursday, 17 March 2016 06:08 AM
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