Property taxes are like a hidden fee on homeownership. You don’t always see them, but they’re there, quietly accumulating in the background until your local county sends you a tax bill. Property taxes are typically based on the value of the home as determined by a formula, not necessarily equal to its cost or price. The value assessment of a home is then multiplied by the local tax rate to find the property tax amount owed by the homeowner. Property taxes can vary dramatically by county as well as state.
State and local governments rely heavily on property taxes. In fact, property taxes account for roughly one-third of all state and local tax collections in the United States, according to the Tax Foundation. That makes property taxes the largest source of state and local tax collections. Yet some residents hardly notice their modest property tax bills, while others may consider moving to a more affordable location in lieu of spending thousands of dollars a year on real estate taxes.
In order to find out who has the biggest property tax liabilities, WalletHub recently analyzed the 50 states and the District of Columbia in terms of real estate property taxes. The site used data from the U.S. Census Bureau to determine real estate tax rates. WalletHub also used the rates to obtain the dollar amount paid in real estate taxes on a median value home in each state. On average, American households spend $2,149 each year on property taxes for their homes.
Let’s take a closer look at the 15 states with the highest property taxes on homes. Remember, be careful what you wish for. Real estate taxes are only one way a state collects revenue from taxpayers.
Effective real estate tax rate: 1.40%
Kansas ranks as the No. 15 worst state in America for property taxes. Residents can be thankful for a low cost of living that helps ease a high effective real estate tax rate. Kansas has a median home value of only $132,000, resulting in a $1,849 tax bill. In comparison, Colorado only has an effective real estate tax rate of 0.60%, while Missouri has 1%.