Property taxes are not usually the biggest part of monthly housing bills, but household tensions are rising.
CoreLogic Data in 2024 pays property taxes 27.4% more homeowners than in 2019. That might help explain why 67% of homeowners who budgeted taxes said their bill was higher than expected this year.
It was also the most cited undervalued cost among Z homeowners, according to a recent insurance survey.
Together, the data suggests that the climbing property tax bill makes it difficult for homeowners to plan ahead.
What homeowners pay with your state property tax
The amounts paid by households vary widely from state to state, with median annual property taxes ranging from $9,163, the highest in New Jersey to $786 in Alabama, the lowest, according to the latest 2023 tax law data.
Don’t forget that these numbers reflect the median value of each state’s property tax bill, not the home value or tax rate. What you pay will vary based on factors such as housing costs, state tax structure, and local policies such as tax exemptions and reductions.
In states that do not have income tax, property taxes often play a major role in funding local services. This is especially true in Texas and New Hampshire. Here, the median bill is the highest in the country. Other states with no income tax, such as Alaska and Nevada, are instead leaning more towards oil revenues and tourism.
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California has the highest home prices in the country, but the maximum valuation limit and the exemption from homes occupied by the owners make the median property taxes lower than in other high-cost states. Additionally, while Hawaii has high household values, the property tax bill remains relatively low as the state relies on general excise taxes to fund government services.
Due to high demand and limited space, housing tends to be more expensive in cities, increasing value and imposing property tax bills. In 2023, the median building reached $9,937 in New York City and $9,554 in San Jose. By comparison, the state-level median reported by the tax foundation is generally lower.
How to avoid the surprise of property tax bills
Property taxes can be easily undervalued, and often result in unexpected costs. Revaluation can further increase costs, so it’s wise for buyers to get a sense of where the tax is headed.
That means reviewing the home’s past tax bills, seeing if the town’s tax base is growing or shrinking, and knowing when the next reassessment will be scheduled, says Vermont-based real estate agent Leo Pond.
“Maintainment taxes are often one of the most undervalued costs of homeownership,” he says.
Pond recommends budgeting between 5% and 10% of the estimated total of the bill, as taxes tend to rise in the value of the home.
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