New Jersey residents face the highest effective property tax rate in the United States, according to an analysis released Tuesday by the nonprofit Tax Foundation, a nonpartisan research think tank based in Washington, D.C.
The "effective tax rate" is a calculation that expresses the average property taxes paid as a percentage of a home's value. In 2022, New Jersey had the highest effective tax rate at 2.08%, followed by Illinois at 1.95% and Connecticut at 1.78%, according to the Tax Foundation.
Additionally, seven of the 15 counties in the U.S. with the highest median property taxes were located in New Jersey: Bergen, Essex, Hunterdon, Morris, Passaic, Somerset, and Union counties—all with median property tax payments exceeding $10,000. Middlesex, Monmouth and Hudson counties also had median property bills over $9,000.
The remaining six counties in the U.S. where median property tax bills exceeded $10,000 annually were found in New York, California and Virginia.
Property taxes vary widely across and within states. The average level of property taxes paid in 2022 across the United States was $1,815. The lowest property tax bills are found in ten counties or county equivalents in Alaska, Louisiana and Alabama—all with median property tax bills under $250 per year.
Some states with high effective property taxes such as New Hampshire (ranked fourth) and Texas (ranked seventh) rely heavily on them instead of other major tax categories. This often involves greater devolution of authority to local governments responsible for more services than states relying more on state-level revenues like income or sales taxes.
Other states such as New Jersey and Illinois impose high property taxes alongside high rates in other major tax categories.
