Where Real Estate Taxes Are Highest – 2023 Study (2024)

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Where Real Estate Taxes Are Highest – 2023 Study? ›

Overall, the New York City area had the highest taxes in the country, with 13 of the 15 most expensive tax counties located in the city or its suburbs. This week's chart shows the 15 counties where property taxes were highest in 2023, and the median home price in each.

The states with the highest effective property tax rates in 2023 were Illinois (1.88 percent), New Jersey (1.64 percent), Connecticut (1.54 percent), New York (1.46 percent) and Nebraska (1.46 percent).

For 2023, states with high income tax rates include California at 13.3%, Hawaii at 11%, and New York at 10.9%, with several others not far behind.

New Jersey has the highest property tax rate at 2.47%, followed by Illinois, Connecticut, New Hampshire, and Vermont. There are 14 counties with an estimated median property tax above $10,000 across California, New York, New Jersey and Virginia.

The five states with the highest average combined state and local sales tax rates are Louisiana (9.550 percent), Tennessee (9.548 percent), Arkansas (9.46 percent), Alabama (9.25 percent), and Oklahoma (8.98 percent).

Hawaii had the lowest effective property tax rate in the country in 2023. It also has the highest typical home value of the 10 states on our list, which means that homeowners in this state may still be on the hook for a hefty tax bill.

According to the updated MoneyGeek analysis, the most “tax friendly” state overall was Wyoming, where the median family owes about 3% of its income in taxes. Meanwhile, 12 states earned either a D or F grade for tax burdens. For some of those states, like Oregon, high personal income tax rates are to blame.

The five states with the lowest average combined rates are Alaska (1.81 percent), Hawaii (4.44 percent), Wisconsin (5.43 percent), Wyoming (5.44 percent), and Maine (5.50 percent).

All states impose certain exemptions that prevent smaller estates from being subject to these taxes. Oregon has the lowest exemption at $1 million, and Connecticut has the highest exemption at $12.92 million. Of the six states with inheritance taxes, Kentucky and New Jersey have the highest top rate of 16 percent.

Why is Texas property tax so high? ›

Texas' growing population and lack of income tax drive up property taxes as the need for more infrastructure grows. Property taxes fund local services such as public schools, infrastructure maintenance, and public safety initiatives. The budgets of these entities continue to grow due to inflation and population growth.

European economies levy some of the highest property purchase taxes in the world on prime real estate, charging on average 4%, or USD 38,356, in tax on a property purchase of USD 1 million, reveals a new study by UHY, a leading international accounting and consultancy network.

New Jersey homeowners shoulder the highest property tax burden, while Hawaii residents enjoy the lowest. New Jersey's median tax is $8,797 on the average home value. Hawaii ranks lowest at $1,893.

Highest taxed states

In 2024, California, Hawaii, New York, New Jersey and Washington D.C. have some of the highest marginal state income tax rates, with each having a top tax rate above 10%.

U.S. state government tax revenue FY 2023, by state

In the fiscal year of 2023, the state of California collected a total of 220.59 billion U.S. dollars in tax revenue, the highest of any state. New York collected the second highest amount of taxes in that year, coming in at 125.19 billion U.S. dollars.