Data released by the Tax Foundation on Tuesday shows New Jersey still has the nation’s highest “effective property tax rate,” a calculation that represents the median property tax bill as a percentage of the value of homeowner-occupied housing.
New Jersey’s statewide effective property tax rate was 2.23% of home values in 2023, slightly lower than the 2.33% effect property tax rate it had for 2022 – but still the highest in the U.S.
Illinois had the second highest effective property tax rate in the nation with property taxes comprising 2.07% of home value, followed by Connecticut (1.92%), New Hampshire (1.71%), Vermont (1.75%), New York (1.60%) and Texas (1.58%).
The nation’s lowest median effective property taxes rate was in Hawaii (0.27%), Alabama (0.38%), Nevada (0.49%), Colorado (0.49%), South Carolina (0.46%) and Arizona (0.52%).
The Tax Foundation, a research think-tank in Washington D.C., calculated the rankings using the U.S. Census Bureau’s 2023 American Community Survey data, the most recent available. Since the effective property tax rate is calculated using median tax bills as a percentage of owner-occupied housing, it excludes property taxes paid by businesses, renters and others.
“Some states with high property taxes, like New Hampshire and Texas, rely heavily on them in lieu of other major tax categories,” wrote Andrey Yushkov, a senior policy analyst with the Center for State Tax Policy at the Tax Foundation. “Other states, like New Jersey and Illinois, impose high property taxes alongside high rates in the other major tax categories.”
Property taxes not only vary by state but also vary widely within states. A county-level breakdown shows homeowners in Menominee County, Wisconsin, pay the highest effective property tax rates in the nation (3.64%) based on median tax bill of $3,527 and a median home value of only $97,000.
Three New Jersey counties are ranked among the top 10 for highest effective property tax rates. Camden County (3.08%) is based on a median tax bill of $8,063 and a median home value of $262,200; Salem County (3.03%) based on a median tax bill of $6,757 and a median home value of $223,000; and Gloucester County (2.81%) based on a median tax bill of $7,964 and a median home value of $283,500.
Tax bills are higher in other New Jersey counties, but the effective tax rate is not because the homes are valued much higher. For example, median property taxes exceeded $10,000 a year in Bergen County, but because the median home value is $593,200 the effective tax rate works out to be 1.66%, the foundation said.
