By Hadassa Kalatizadeh
A new report has revealed that New Jersey residents pay the highest property taxes in the United States. WalletHub revealed the findings in a recent report which compared home and vehicle taxes nationwide using U.S. Census Bureau data. .
As per the report, NJ homeowners have a 2.49% real estate tax rate. That means that on a median priced home of $335,600 in NJ, homeowners pay $8,362 in property taxes. As per WalletHub’s report, the average American household spends $2,471 on property taxes annually. NJ residents will pay the most in lifetime property taxes, $378,087 on average. The Garden State governments also take the highest share of its residents’ lifetime earnings at 49.51%.
Such high tax rates in certain states lead to more than $14 billion in property taxes going unpaid each year, as per the National Tax Lien Association. As reported by The Center Square, experts advise that homeowners can usually write off some or all of their property taxes on their federal income taxes depending on their state’s tax rate and home value. “Unfortunately, living in the Northeast has become a very expensive proposition if you want to own properties,” said Ralph DiBugnara, president of Home Qualified and senior vice president at Cardinal Financial on Realtor.com. “But homeowners should be aware of what they can write off when it comes to homeownership, especially in these high-tax areas.”
As per the WalletHub report, after NJ, the state with the highest property taxes is Illinois with a 2.27% effective rate, followed by New Hampshire (2.18%), Connecticut (2.14%), Vermont (1.9%), and Wisconsin (1.85%). The state which enjoys the lowest property tax rate is Hawaii with an effective rate of .28%, followed by Alabama at .41%.
“The situation is very different from state to state,” said WalletHub Analysis Jill Gonzalez. “All states rely on property taxes to some extent, and everybody pays them, including businesses. Those that rely on them more heavily, usually lack other taxes. So one way to reduce these taxes would be to impose others instead.” Consumers can request a reevaluation of their homes assessment, if they feel the value is too high, she said. “You can dispute your property tax,” Gonzalez added. “Other than that, there’s not much room for negotiation. If you’re too burdened by your property tax, you could consider moving to a state with a lower rate.”