Property taxes, the single largest revenue source for local governments, are ratified, collected, and spent almost entirely at the municipal level. As a result, the United States is a patchwork of property tax codes, and depending on where you live, property taxes can be either a trivial expense or a major financial burden.
Generally, property taxes are collected as a set share of the value of a given home or parcel of land. Depending on local laws, home or property values are assessed periodically based on estimated sale prices, or they are valued using the sale price at the last acquisition of the property.
Though not all parts of the country use tax revenue the same way, property taxes generally fund fire and police departments, schools, and road maintenance, including snow removal, cleaning, and repair.
On average, state and local governments in the United States collected $1,518 in property taxes per person during the 2015 fiscal year. However, in some parts of the country, per capita property tax collections were more than double that amount.
To determine the states with the highest and lowest property taxes, 24/7 Wall St. reviewed the effective property tax rate — the total amount of property taxes paid annually as a percentage of the total value of all occupied homes — for all 50 states, from tax policy research organization the Tax Foundation. Property tax data is for the 2015 fiscal year, and is published in the Tax Foundation’s report “2018 Facts & Figures: How Does Your State Compare?” States with relatively low effective property tax rates do not necessarily have low tax revenue. If real estate values in an area are high, then even a relatively low property tax rate can generate considerable revenue.
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