Property taxes are a significant factor for homeowners and potential buyers, influencing the overall cost of living and long-term affordability of owning property.
While they vary across the U.S., some states have seen a dramatic surge in property tax rates, leaving residents burdened with escalating costs. In this article, we’ll explore eight states where property taxes are skyrocketing, uncovering the reasons behind the hikes and what it means for homeowners. Whether you’re planning a move, considering an investment, or just curious, these insights can help you navigate the changing landscape of property ownership.
NEW YORK
The state of New York consists of five boroughs, one of which is the famous New York City. It is the fourth most populous state in the U.S. and is also very expensive to live in. New York has an effective property tax rate of 1.40%, and the average annual property tax rate is $3,407.29.
New York doesn’t have an inheritance tax but an estate and gift tax. Estate taxes range from 3.06% to 16%.
RHODE ISLAND
Rhode Island is the smallest state in the United States and is nicknamed “The Ocean State.”
The state’s effective property tax rate is 1.40%, and the average annual property tax rate is $3,432.79. Rhode Island doesn’t have an inheritance tax but an estate tax. Estate taxes range from 0.8% to 16% and are only levied on estates worth more than $1,733,264.
MICHIGAN
Michigan is also called the “Great Lakes State” because it is the only state in the U.S. that borders four of the five Great Lakes.
Michigan has an effective property tax rate of 1.38%, and the average annual property tax rate is $7,369.50.
The state has neither an estate tax nor an inheritance tax.
PENNSYLVANIA
Pennsylvania is the birthplace of the Declaration of Independence and the U.S. Constitution, thereby earning itself the nickname “The Keystone State.” The state has an effective property tax rate of 1.49% and a high average annual property tax rate of $7,087.11. Pennsylvania does not have an estate tax but has an inheritance tax ranging from 0% to 15%, where direct heirs pay a tax of 4.5%, siblings pay a tax of 12%, and unrelated heirs pay a tax of 15%.
KANSAS
Kansas, also known as “the Sunflower State,” has an effective property tax rate of 1.34% and an average annual property tax rate of $2,610.67.
Kansas doesn’t have an estate tax or an inheritance tax.
MAINE
Maine, also known as the “Pine Tree State,” is the largest state in New England, with over four thousand beaches off its coast. Maine’s effective property tax rate is 1.24%, and the average annual property tax rate is $2,586.29.
Maine doesn’t have any inheritance tax, but there is an estate tax ranging between 8% to 12%, with an exemption of up to $6.41 million.
MASSACHUSETTS
Massachusetts, nicknamed “The Bay State,” is the seventh smallest state in the United States. The state has an effective property tax rate of 1.14%, and the average annual property tax rate is $4,534.54.
Massachusetts doesn’t have an inheritance or gift tax, but there is an estate tax of 0.8% to 16% on estates worth more than $2 million.
SOUTH DAKOTA
South Dakota is known for the famous Mount Rushmore National Memorial, after which it’s nicknamed. The state has an effective property tax rate of 1.17%, and the average annual property tax rate is $2,974.75.
South Dakota doesn’t have an estate tax or an inheritance tax.
11 Other States With the Highest Property Taxes in 2024
Property taxes are charges levied by governments and paid by real estate owners. They are the primary source of revenue for local governments in the U.S. In 2022, $67.8 billion was the property tax revenue in New York state alone. All immovable assets come under property tax.
