Blue states lead the way for highest property taxes

Property taxes are a thorn in the side of some U.S. homeowners, depending on the state or region. As home prices and property values rise in 2025, rising property taxes are impacting some places more than others.

Personal finance website WalletHub released its 2025 Property Taxes by State report on Monday, ranking all 50 states based on property tax expenses.

WalletHub’s study noted that the average U.S. household spends $2,969 per year on property taxes, according to data from the U.S. Census Bureau. The study tapped into census data to analyze the 50 states and the District of Columbia to rank them on real estate taxes. The report calculated property tax rates by dividing the median real estate tax payment by the median home price in a given state.

WalletHub also “used the resulting rates to obtain the dollar amount paid as real-estate tax on a house worth $303,400.” That was the median value for a U.S. home as of 2023, according to the most recently available census data.

Red states, on average, posted lower property taxes than blue states.

Hawaii led all states with the lowest effective real estate tax rate of 0.27%. Based on the 2023 median home value, homeowners there would’ve paid about $820 in annual property taxes. But Hawaii’s median home value is $808,200, which brings a median annual tax payment of $2,183.

Second place belongs to Alabama, which has an effective property tax rate of 0.38%. Its annual taxes total $1,148 on a $303,400 home. But Alabama also has one of the lower median home values in the U.S. at $195,100, and the corresponding property tax payment at that price is $738.

Nevada and Colorado each had effective real estate tax rates of 0.49%.

At the other end of the spectrum, the states with the highest property tax rates are mostly on the East Coast.

New Jersey was at the bottom of list with the highest effective property tax rate of 2.23%. Based on the U.S. median home value of $303,400, homeowners in the Garden State pay $6,770 in annual property taxes. But the state’s current median home value of $427,600 is accompanied by an annual property tax bill of $9,541.

New Jersey was followed by Illinois (2.07% tax rate), Connecticut (1.92%) and New Hampshire (1.77%).

Over a 13-year time frame, Texas posted consistently high real estate tax rates, according to WalletHub. It remains among the 10 states with the most expensive property taxes. And other states like Nebraska and New York have followed a similar pattern.

WalletHub urges homeowners to consider property tax expenses before making major moves in 2025.

“Some states charge no property taxes at all, while others charge an arm and a leg. Americans who are considering moving and want to maximize the amount of money they take home should take into account property tax rates, in addition to other financial factors like the overall cost of living, when deciding on a city,” WalletHub analyst Chip Lupo said.