New Jersey Tops in Property Taxes, Louisiana Among Lowest
Property taxes accounted for about 22% of state and local government revenue in 2005, according to a special study by NAHB economists of residential real estate tax rates in the U.S.
“The analysis of real estate taxes across states is an important source of information for estimating the economic impact of housing, comparing the affordability of housing and cost of living in general, and making decisions about relocating or retiring in a different state,” says Natalia Siniavskaia, the author of the NAHB HousingEconomics.com report.
Siniavskaia notes that it is often difficult to compare effective tax rates on residential real estate based on state and local government data because local jurisdictions follow different assessment, administration and reporting procedures and 37 states also collect property taxes on the state level. However, expansion of information collected by the U.S. Census Bureau at the request of NAHB has provided more data for counties and metropolitan areas.
State and local governments in New Jersey and New Hampshire rely on property taxes for their revenue more than governments in any other state, the study finds.
New Hampshire, a state that does not tax wages and salaries, derives almost 43% of statewide government revenue from property taxes. New Jersey derives 35%.
All six New England states are among the 10 states most dependent on property taxes as a source of government revenue, according to the report. On the other hand, Delaware, New Mexico and southern states such as Alabama, Arkansas and Louisiana derive no more than 9% to 11% of statewide revenue from property taxes.
The study finds a strong correlation between the extent to which state and local governments rely on property taxes to fund local services and the amount of real estate taxes they collect per home. While state median property taxes per home reflect home values to a certain extent, the correlation is not as strong.
Among other findings of the study:
- The state with the highest median real estate taxes is New Jersey, where more than 50% of all households pay more than $5,352 in property taxes per home. States like California, Hawaii and the District of Columbia have higher home values than New Jersey but on average collect significantly less real estate taxes per property. The state with the second highest property taxes, New Hampshire, collects a median of $3,920, or $1,432 less per home than New Jersey.
- At the low end of the spectrum, states in the South Census Region — such as Arkansas, Mississippi, West Virginia, Alabama and Louisiana — have median real estate taxes that don’t even reach $500. In Louisiana, half of all households pay less than $175 in taxes per home.
- With its generous homestead exemption, Louisiana has the lowest real estate tax rate in the nation, at $1.72 per $1,000 of home value. Two states with the highest effective tax rates are Wisconsin and Texas, where rates exceed $18 per $1,000 of property value.
- Median home values in the highest tax rate states — Wisconsin and Texas — are well below the national average. But the three states (including Washington, D.C.) with the most expensive homes — California, Hawaii and the District of Columbia — have some of the lowest property tax rates in the nation — $4.77, $2.04 and $3.76 per $1,000 of value, respectively.
- Niagara, N.Y. is the county with the highest effective median tax rate, with a rate of $28.12 per $1,000 of value. New York stands out for having the most diverse tax rates across the state. At the low end, Kings County has a tax rate of $4.79 per $1,000 of value, almost six times lower than in Niagara.
- Among states where there is data covering more than two counties, Nebraska has the most consistent tax rates across its counties.
- St. Bernard Parish, La.; Maui, Hawaii; and Apache County, Ariz. have the lowest median tax rates among all counties — $1.35, $1.62 and $1.64 per $1,000 of value, respectively.
Construction Forecast Conference Now Available on the Internet
The simultaneous Webcast of the Construction Forecast Conference — Spring 2007 held in Washington, D.C. on April 26 is available for purchase for the next three months.
Those interested can purchase the conference Webcast, which includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
Purchasers will receive unlimited access to the Webcast archive for three months, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections.
To Purchase the Webcast
To purchase the Webcast, visit www.nahb.org/cfcwebcast.
Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.