New Jersey residents have the nation’s highest effective property tax rate in the nation, according to an analysis released Tuesday by the nonprofit Tax Foundation, nonpartisan research think tank headquartered 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 worst effective tax rate (2.08%) in the U.S., followed by Illinois (1.95%) and Connecticut (1.78%), the Tax Foundation said.
Looking at the data another way, seven of the 15 counties in the U.S. with the highest median property taxes were in New Jersey: Bergen, Essex, Hunterdon, Morris, Passaic, Somerset, and Union counties All have median property tax payments exceeding $10,000. Additionally, Middlesex, Monmouth and Hudson counties had median property bills over $9,000
The remaining six counties in the U.S. where median property taxes bills were over $10,000 a year were in New York, California and Virginia, according to the Tax Foundation analysis.
Property taxes paid vary widely across (and within) the 50 states. The average level of property taxes paid in 2022 across the United States was $1,815. The lowest property tax bills in the country are in 10 counties or county equivalents in Alaska, Louisiana, and Alabama. All these places have median property tax bills under $250 a year.
Some states with high effective property taxes, such as New Hampshire (No. 4) and Texas (No. 7) rely heavily on them in lieu of other major tax categories. This often involves greater devolution of authority to local governments, which are responsible for more government services than states that rely more on state-level revenues, such as income or sales taxes.
Other states, such as New Jersey and Illinois, impose high property taxes alongside high rates in the other major tax categories, the Tax Foundation noted.
