States With the Highest Property Taxes in 2026
TL;DR
New Jersey has the highest effective property tax rate in the country at about 2.23%, followed by Illinois at 2.08% and Connecticut at 2.00%. On a $350,000 home, New Jersey homeowners pay roughly $7,800 per year in property taxes, compared to the national average of about $3,150. High property tax states tend to rely more on property taxes to fund schools and local services. If you live in one of these states, knowing your options for exemptions and appeals is especially important.
The Top 10 Highest Property Tax States
Property tax rates are best compared using the "effective tax rate," which is the median property tax paid as a percentage of median home value. This accounts for differences in assessment ratios and exemptions across states.
| Rank | State | Effective Tax Rate | Median Home Value | Median Annual Tax |
|---|---|---|---|---|
| 1 | New Jersey | 2.23% | $401,400 | $8,951 |
| 2 | Illinois | 2.08% | $239,100 | $4,973 |
| 3 | Connecticut | 2.00% | $313,600 | $6,272 |
| 4 | New Hampshire | 1.86% | $349,900 | $6,508 |
| 5 | Vermont | 1.83% | $278,700 | $5,100 |
| 6 | Wisconsin | 1.61% | $241,600 | $3,890 |
| 7 | Texas | 1.60% | $272,800 | $4,365 |
| 8 | Nebraska | 1.54% | $210,200 | $3,237 |
| 9 | New York | 1.40% | $384,100 | $5,377 |
| 10 | Ohio | 1.36% | $183,300 | $2,493 |
Note: Rates are approximate and based on the most recent census and tax data available. Individual rates within each state vary significantly by county and municipality.
Why These States Have High Property Taxes
Heavy Reliance on Property Tax Revenue
States with high property taxes typically depend on them to fund a larger share of government services, especially education. New Jersey, for example, funds a significant portion of its school budgets through property taxes. This creates high tax rates but also means well-funded local services and strong public schools.
No Income Tax Requires Higher Property Tax
Two of the highest property tax states, Texas and New Hampshire, have no state income tax. They compensate by taxing property at higher rates. This is an important nuance: a state's total tax burden includes income tax, sales tax, and property tax. Texas may have high property taxes, but the absence of state income tax can make the overall burden comparable to states with moderate property taxes and high income taxes.
Local Government Fragmentation
States with many layers of local government (counties, cities, townships, school districts, fire districts, library districts) tend to have higher property taxes because each layer adds its own levy. Illinois, with roughly 7,000 taxing districts (more than any other state), is a prime example.
Pension Obligations and Debt
Some high-tax states carry substantial pension obligations for retired public employees. Illinois owes over $200 billion in unfunded pension liabilities. New Jersey faces similar challenges. These costs get passed on through property taxes.
A Closer Look at the Highest-Tax States
New Jersey
New Jersey consistently ranks #1 in property taxes. The average homeowner pays nearly $9,000 per year. Property taxes fund about 50% of local government revenue, with school districts taking the largest share. The state has no statewide reassessment mandate, so many municipalities are working off outdated assessments, creating inequities between neighbors.
New Jersey does offer several relief programs, including the ANCHOR benefit (a property tax credit of $1,500 for homeowners with income under $150,000), the senior freeze program, and veteran exemptions. But even with these programs, bills remain the nation's highest.
Illinois
Illinois has the second-highest effective rate, driven by massive pension obligations and a fragmented local government structure. Cook County (Chicago) is particularly expensive, with effective rates often exceeding 2.5%. The state's assessment process has faced criticism for inequity, with studies showing that lower-value homes are often over-assessed relative to higher-value homes.
Illinois offers a standard homestead exemption, senior exemption, senior freeze, and veteran exemptions. The homestead exemption is $10,000 in Cook County and $8,000 elsewhere (applied to equalized assessed value).
Connecticut
Connecticut combines high property taxes with high income taxes, making it one of the most expensive states for overall taxation. The state assesses property at 70% of market value. Towns handle assessments, and reassessment happens every 5 years. The state offers limited relief programs compared to other high-tax states.
Texas
Texas is unusual in the top 10 because it has no state income tax. The state recently increased the homestead exemption for school district taxes to $100,000, which has helped. Assessment caps limit annual increases to 10% for homesteaded properties. But with rapidly rising home values in cities like Austin, Dallas, and Houston, many homeowners have seen steep increases despite the caps.
Texas has an active appeal process. In Harris County (Houston) alone, about 25% of homeowners file protests each year, and the majority receive some reduction.
How High Property Taxes Affect Homeowners
Monthly Payment Impact
Property taxes are a major component of your monthly housing cost. On a $350,000 home in New Jersey, property taxes add about $650 per month to your housing payment. In Illinois, it's roughly $580. Compare that to Hawaii (about $80/month) or Alabama (about $120/month). This difference significantly affects affordability and how much home you can buy.
Limited Federal Deduction
The $10,000 SALT cap on the federal property tax deduction hits hardest in high-tax states. A New Jersey homeowner paying $9,000 in property taxes and $5,000 in state income taxes has $14,000 in SALT but can only deduct $10,000. That's $4,000 in taxes that provide no federal benefit.
Impact on Home Values
High property taxes can put downward pressure on home prices because buyers factor in the total cost of ownership. A home that carries $10,000 per year in property taxes is effectively more expensive than an identical home in a low-tax area with a $3,000 tax bill, even if the asking price is the same.
What You Can Do About High Property Taxes
- Check your assessment. Make sure your assessed value is accurate and in line with actual market value. In high-tax states, even a 5% reduction in assessed value can save you hundreds per year.
- Claim all exemptions. Many homeowners miss homestead exemptions, senior exemptions, and veteran exemptions simply because they never applied.
- Appeal if overassessed. In high-tax states, the dollar impact of winning an appeal is larger. A 10% reduction on a $400,000 assessed value at a 2% tax rate saves $800 per year.
- Look into relief programs. Many high-tax states offer property tax relief programs, credits, and rebates you may qualify for.
- Vote on local levies. Your mill rate includes levies approved by voters. Pay attention to ballot measures that affect your tax rate.
Frequently Asked Questions
Which county in the US has the highest property taxes?
Some of the highest property tax counties are in the suburbs of New York City and Chicago. Bergen County, NJ, Westchester County, NY, and Cook County, IL consistently rank among the highest. The median annual property tax in some NJ counties exceeds $12,000.
Are high property taxes always bad?
Not necessarily. High property taxes often correlate with well-funded schools, good infrastructure, and strong local services. Some homeowners willingly pay higher taxes for these benefits. The question is whether you're getting value for your tax dollars and whether your individual assessment is fair.
Do states with no income tax always have high property taxes?
Not always, but there's a correlation. Texas and New Hampshire have no income tax and high property taxes. But Florida and Tennessee have no income tax and relatively moderate property taxes because they rely heavily on sales tax instead.
Why is New Jersey's property tax so much higher than other states?
New Jersey relies on property taxes to fund about 50% of local government, has strong teacher and public employee unions that negotiate high salaries and benefits, has many small municipalities each with their own government and school district, and has some of the highest-performing public schools in the country. All of this costs money.
Is it better to live in a high property tax state with no income tax?
It depends on your income and home value. High earners often benefit from no income tax even if property taxes are higher. Homeowners with modest incomes and expensive homes may be worse off. Run the numbers for your specific situation.
Can I reduce my property taxes in a high-tax state?
Yes. You can appeal your assessment, claim all available exemptions, apply for relief programs, and vote on local levies and bonds. You can also choose to live in a lower-tax jurisdiction within the state. Tax rates can vary by 50% or more between adjacent counties or school districts.
How do property tax rates change over time?
Rates can go up or down based on local government budgets, voter-approved levies, and changes in assessed values across the jurisdiction. When values rise and the tax levy stays flat, the rate should decrease. When governments increase spending, rates typically go up.
Are property taxes higher in cities or suburbs?
It varies. In many metro areas, suburban school districts have higher tax rates than the city because they're smaller and don't benefit from the broad commercial tax base that cities have. But some cities have very high rates due to pension obligations, infrastructure costs, and high service demands.
Living in a High-Tax State? Fight Back.
In high property tax states, an overassessment costs you more than anywhere else. PropertyTaxFight helps homeowners in the toughest tax environments identify overassessments and build winning appeals. When every percentage point of assessed value costs you hundreds of dollars, getting it right matters.