The average American household spends $2,690 on real estate property taxes, and an additional $444 for residents in the 26 states with vehicle property taxes.
More than $14 billion in property taxes go unpaid each year, according to the National Tax Lien Association.
Waynesboro, Staunton and Augusta County residents are feeling the pinch on their bank accounts with increased taxes this year, but other states are feeling more of a pinch.
WalletHub released its report on 2023’s Property Taxes by State. Data includes home and vehicle taxes across the nation.
The lowest real estate property tax is in Hawaii, followed by Alabama, Colorado, Nevada and Louisiana. Virginia has the 20th lowest real estate property taxes. The highest are in New Jersey, Illinois, Connecticut, New Hampshire and Vermont.
The highest vehicle property taxes are in Virginia, followed by Mississippi, Missouri, South Carolina and Maine. The lowest, in states that have a vehicle property tax, are in Louisiana, Michigan, California, Alabama and Iowa.
The report highlights that Hawaii residents pay $700 in real estate tax, 8.7 times lower than $6,057 in New Jersey.
Of the 26 states that require vehicle property tax, Louisiana has the lowest at $26, 40 times lower than the highest, which is $1,039 in Virginia.
Democrat states have 30.18 percent higher real estate property taxes, an average of $2,991, while Republican states pay an average $2,297.
When Americans consider where to move, Timothy M. Harris, a visiting Assistant Professor at the University of Maine School of Law, said property taxes is one of the factors considered, as well as proximity to work, school quality, government services, transportation, crime, parks, recreation, environmental quality and walkability.
“When considering the local tax rate of a target jurisdiction, people should — and occasionally do — consider the value they are getting for their taxes. If higher taxes are coincident with better government services, property values are generally higher and communities are more livable. People considering relocating should consider whether lower taxes mean fewer transportation options and reduced government services. Generally, urban areas have higher taxes and more services, but the quality and availability vary widely between cities (and sometimes between neighborhoods),” Harris said.
Dr. Alex Combs, an assistant professor at the University of Georgia, said that property taxes should be considered.
“Differences in property taxes affect residential mobility patterns, so it seems the average person does consider property taxes. After all, people are sensitive to price, and the property tax is a visible cost of homeownership that funds generally desirable government services like education and public safety. If they have the opportunity, people are going to seek the biggest benefit for their property tax buck,” Combs said.
Michael D. Belsky is Managing Principal EKI Digital and Quant 16, and he believes individuals on fixed or low incomes should be provided some relief from paying property taxes.
“Most forms of relief either cap the taxable value of property or tax rates. I advocate for this, particularly in states where there is an appeals process taken advantage of by private sector entities and wealthy individuals who can afford attorneys to get their taxes reduced. In many instances this shifts,” Belsky said.
Combs said that every state has property tax relief programs for certain groups, including seniors, individuals with disabilities, veterans and low-income homeowners.
“Exemptions can reduce the regressivity in the property tax and help those on fixed incomes afford rising property values. One concern is whether exemptions reduce the provision of government services, especially for those the exemptions are intended to help. My research on this topic found no evidence that property tax exemptions in Kentucky meaningfully reduce education spending or test scores. This is consistent with similar studies in other states. Of course, there are numerous services that exemptions could impact, and the design of exemptions is highly variable across governments. Though a one-size-fits-all answer is unlikely, property tax exemptions appear to be an effective tool for increasing equity without introducing significantly counterproductive consequences,” Combs said.
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Rebecca Barnabi
