Think your property tax rates are high? It’s all relative.
The Tax Foundation has compiled a list of property tax rates by state – with a twist. It’s not always easy to rank property tax rates because states tax real property using a variety of methods.
In my home state of Pennsylvania, for example, the formula to calculate real property tax is simply the assessment multiplied by the millage; assessments, based on common-level ratios, and millage can vary from county to county. The same is true in New Jersey where tax rates are calculated by multiplying the assessed value by the general tax rate; the general tax rate may vary by district. What that means, though, is that you can’t simply say “New Jersey property tax rates are 3% of value” or even “a house valued at $200,000 in Pennsylvania will be taxed at 4%.” There are way too many variables.
To try and give you a sense of the property tax rates overall, the Tax Foundation calculated the average amount of residential property tax actually paid, expressed as a percentage of home value. That should produce a more even result since it factors in the cost of living in different geographic areas. Their calculations are also based on owner-occupied properties and don’t include rentals or corporate properties, in an attempt to compare apples to apples.
So what did they find? It probably won’t shock residents in the Garden State to hear that New Jersey held the top rate.
To find out where your state ranked, click over to the Tax Foundation.
