Paul L. Caron

Monday, September 29, 2008

Property Taxes: High in Blue States, Low in Red States

The Tax Foundation has published New Census Data on Property Taxes on Homeowners, by Gerald Prante, along with the underlying data (by state, by county).  Below are the Top 10 and Bottom 10 states in the three categories:

  • Median Real Estate Tax
  • Real Estate Tax as Percentage of Home Value
  • Real Estate Tax as Percentage of Income

Note that 26 of the 30 highest-tax states in the three categories are Blue States that voted for John Kerry in 2004, and that 24 of the 30 lowest-tax states in the three categories are Red States that voted for George Bush in 2004:


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You notice that nobody talks about services rendered for those taxes. Go into those red states and you'll find low-paying jobs or no jobs. You'll find people with less education. And the states offer fewer services. As the old commercial used to say, "you get what you pay for."

Posted by: rick zollo | Nov 6, 2008 12:20:28 PM

Well of course the taxes in blue states are higher! Most of those same blue states get back less than they put in to the Fed - the majority of Fed money goes to red states. Those of us in the blue states have to support ourselves as well as some of those in the red states.

Posted by: Steve D | Oct 6, 2008 6:37:51 AM

Mark, look up>Proposition 13. We keep electing Democrats, then passing propositions to undo some of the damage.

Posted by: Anthony | Sep 29, 2008 7:03:35 PM

California Democrats are PREVENTED from raising the property tax rates unless it is approved by the public. They've tried and failed to tweek the law.

It may be relatively low as a percentage of home values, but it actually is set at 1.25% of a homes NEW sales price when it gets sold...which means, that since property values are dropping and homes are selling for less...less money is going to the state.

Posted by: Dave | Sep 29, 2008 6:33:43 PM

Being in New Hampshire I would like to also point out that we have NO sales tax or income tax.

If your state is taking 5-8% as income tax AND 5-8% for everything you buy, you'd be happy to be here. E.g. Joisey has a 7% [I think] sales tax on top of your property tax PLUS a 5-6% [again, I think] income tax--I'd rather have neither myself; and I don't.

Live Free or Die!

Posted by: Sean | Sep 29, 2008 4:57:00 PM

I was surprised California has such a low rate as a percentage to the home price. I'd expect the Democrats to jack up the rates sooner or later.

Posted by: mark | Sep 29, 2008 4:50:19 PM

Note that California property tax doesn't go up with housing values, unless the house changes hands.

Therefore, older people who have kept their homes may pay 0.1% of the home value, whereas younger and/or recent buyers pay the nominal 1.1% (plus random local stuff, which can be significant, or nonexistent).

I live in a neighborhood that has been "blue" for a long time, with many older Boomers paying laughable property taxes and supporting more taxation -- for those of us who are already paying many times as much as they are.

The "Generation Gap" of the Boomers still exists, but in new ways...

Posted by: BarryD | Sep 29, 2008 2:32:17 PM

The New York stats are deceiving. The high population areas around New York City like Westchester, Nassau, and Suffolk counties pay far higher property tax, averaging more like $9000 per year. If you own a modest 1200 sq. ft. cape on a 5000 sq ft lot, your tax will be about $8500 in most of Nassau or Westchester. Approximately 2/3 of the property tax funds the government schools to fund the extravagant salaries and benefits paid to union teachers and administrators.

In addition you will pay a sales tax in the area of 8.75% and the NYS state income tax. I believe that, when everything is totaled, Nassau county is supposed to be the most heavily taxed county in the U.S. as a percentage of income.

New York City property taxes are somewhat lower on single family homes and up to 3 family homes. That is because the city charges gargantuan property taxes on multi family housing, rentals, condos and coops. Additionally, NYC had its own income tax on residents.

Posted by: sparky | Sep 29, 2008 2:14:36 PM

Until Federal spending in the various States shows up, this chart only tells part of the story. Some States that loudly boast of their financial savviness only do so with Federal financing while others who look (on this chart) like beggars and thieves get much less than they pay out.

That's not to say that some States aren't savvy or that others aren't run like petty kleptocracies, but it's too big a thing to leave out of the picture.

Posted by: jon | Sep 29, 2008 1:55:07 PM

Hope this is not a double post.

I noticed an inaccuracy in my home county, Orange in North Carolina. While the 1.0% county property tax rate is correct, no mention is made about city property taxes on top of the county property taxes. About 80% of the county population lives in one of 3 city limits, Chapel Hill, Carrboro, or Hillsborough. You would need to add 0.585%, 0.6755%, or 0.807% (depending on fire district) to your county property taxes of 1.0%.

Would this be a common "bug" in miscalculating the property taxes a homeowne actually pays when looking at county data? Do the State medians not count the city property taxes as well?

Posted by: WJ | Sep 29, 2008 1:34:56 PM

Texas ranks high in tax as % of home value. Homes in Texas are dirt cheap. The same house in the northeast is twice as much.'re paying 1.84% of $300,000 instead of 1.84% of $600,000. Also, we have a homestead exemption for primary residence which lowers taxes somewhat.

Posted by: smitch | Sep 29, 2008 1:24:09 PM

I'd like to see the percentage of high school graduates who go to four year colleges from each state, and the high school drop out rates for each as well.

Seems to me that the high property tax states send a lot more children to college than do the low property tax states.

I'm not saying that the local property tax is necessarily the best way to fund education. But I think it is true that where we collect a larger share of the economic rent, a lot of things work better than where people get to privatize the rent.

Posted by: LVTfan | Sep 29, 2008 1:18:03 PM

For my home county, Orange in North Carolina, there is what I would call an inaccuracy as to how much is really paid in property tax. The listed property tax rate for Orange County is correct at 1.0%, however what is missing is city property taxes.

About 80% of the county lives in one of 3 cities: Hillsborough, Chapel Hill, & Carroboro. Each one of these cities adds in an additional property tax of 0.585%, 0.6755%, & 0.807% respectively (depending on which fire district) to the 1.0% that is required for the county.

Are the State medians not picking up the city property taxes? Are there other counties with the same missing city property taxes?

Posted by: WJ | Sep 29, 2008 1:17:26 PM

why do you show median? that really isnt helpful, why not weighted average?

Posted by: willofcc | Sep 29, 2008 12:47:46 PM

Texas is an outlier because they fund the schools largely (until recently almost exclusively) through a separate and highly visible category of property tax. That tax varies locally based upon how much people want to spend to fund their schools. Unlike a lot of the higher-tax blue states, Texas actually builds schools in growth areas as their need increases, versus waiting for overcrowding.

Posted by: SMsgt Mac | Sep 29, 2008 12:42:10 PM

New Jersey enacted a personal income tax (gross income tax) to offset property taxes in 1976. It was meant as a "temporary measure". Since then, they've increased the sales tax (2007) to offset property tax increases. Yet, New Jersey property taxes continue to rise, and remain the worst in the nation.

So, not only does NJ have the highest property taxes in the nation, but it imposed taxes to pay for property tax relief that do nothing but increase the tax burden on New Jersey taxpayers.

Posted by: lawhawk | Sep 29, 2008 12:41:34 PM

You'll see NJ at the top of the list for median tax and as % of income. We are in the top five for % of home value. Lucky for us, we also have a 7% sales tax AND an income tax!! Gotta love the Dems in control of our state.

Posted by: NJ resident | Sep 29, 2008 12:37:12 PM

Where is CA. as percent of income?

Posted by: bc | Sep 29, 2008 12:03:39 PM

Texas ranks high in % property tax, but has no state income tax, a good tradeoff.

I propose that high property taxes are good for the Texas state economy. It costs money to live in Texas. Even apartments must pass along the property tax. People must either make money or leave. It is not economical to just "squat" in Texas. Be productive or go to another state. Zero income tax encourages that trend.

And it works. The majority of all US private jobs are created in Texas.

Posted by: Zoot Fenster | Sep 29, 2008 11:56:42 AM

Problem is, there is no context with the above table. Include a table of overall tax burden on a state's citizens for completeness.

Being from NH, we generally rank high on Property taxes (no surprise). However, not having a sales or income tax, our overall burden ranks us as among the first or second with respect to the least taxed states overall.

Never fear, however! The Dems jacked up the state budget by 17.5% last year, so they are now pushing for a broad based tax to "fill in for the revenue shortfall".

Posted by: skip | Sep 29, 2008 11:54:07 AM

Texas may be an outlier because it doesn't have an income tax.

Posted by: Alan | Sep 29, 2008 11:47:25 AM

I found the same result by comparing current gas prices to how states voted in the 2004 election. I chalked it up to higher state gas taxes and environmental regulations in blue states.

Posted by: mike | Sep 29, 2008 11:42:22 AM

I found the same result by comparing current gas prices to how states voted in the 2004 election. I chalked it up to higher state gas taxes and environmental regulations in blue states.

Posted by: mike | Sep 29, 2008 11:42:16 AM


Lets see the corresponding data for 2003 and 1999. Wonder if these figures connect to states utilizing electronic voting also? I wouldn't be surprised much!

Posted by: Concerned | Sep 29, 2008 8:42:14 AM