When Steven John, a writer, moved from Los Angeles County to a suburb of New York City in 2016, he didn't expect his property taxes to skyrocket.
But after a reassessment of the slightly larger New York house he and his wife bought and renovated, he wrote for Insider, his taxes climbed to $20,000, double his $10,000 annual property-tax bill in California.
As home sales close at a pandemic-driven breakneck pace across most of the US, it's important for buyers to know what tax payments are expected where, whether they're purchasing their first homes or investing in units to rent out for passive income.
Property-tax changes can result in sudden jolts to your expenses— especially right now. Many of the hot markets across the US right now skew in favor of sellers, which forces buyers to make above-ask bids, or sometimes even offer all cash when competing to land one of a limited number of properties on the market. High property prices nationwide also mean that calculating your tax bill is all the more important for people trying to stick to a budget who are also weighing the cost of a move.
Over the course of the pandemic, and even before, urban dwellers in places like New York and California have decamped to states like Texas, where the lack of a state income tax can be alluring. But consider that Texas has an annual property tax rate of 1.80%, higher than both California and New York, which levy effective real-estate taxes of 0.76% and 1.72%, respectively.
A new study by the personal-finance website WalletHub ranks every US state according to its property-tax rate. It shows which states have the lowest effective rates and how much a typical homeowner can expect to pay annually based on each state's median home value.
New York, New Jersey, and Connecticut crowd the bottom of the list, with some of the most expensive real-estate tax rates in the country. Other states, like Hawaii and Colorado, impose the least additional costs on homes.
These 10 states are the most wallet-friendly in the property-tax department:
10. Wyoming
Wyoming has the 10th-lowest real-estate tax rates in the US, at 0.61%.
The median home value in Wyoming is $220,500, which means annual taxes on a home priced at the state's median value are $1,337.
9. Nevada
Nevada's property-tax rate comes in at 0.6%.
The median home value in Nevada is $267,900, meaning annual taxes on a home priced at the state's median value are $1,614.
8. West Virginia
West Virginia's property-tax rate is 0.58%.
The median home value in South Carolina is $119,600, which means annual taxes on a home priced at the state's median value are $698.
6. Delaware (tied)
Delaware, tied with South Carolina, levies a 0.57% property tax.
The median home value in South Carolina is $251,100, meaning annual taxes on a home priced at the state's median value are $1,431.
6. South Carolina (tied)
South Carolina, tied with Delaware, also has a property-tax rate of 0.57%.
The median home value in South Carolina is $162,300, meaning annual taxes on a home priced at the state's median value are $924.
5. District of Columbia
The District of Columbia taxes homeowners at a rate of 0.56%.
The median home value in DC is $601,500, which means annual taxes on a home priced at DC's median value are $3,378.
4. Louisiana
Louisiana is home to the fourth-lowest real-estate tax rate in the US, at 0.55%.
The median home value in Louisiana is $163,100, which means annual taxes on a home priced at the state's median value are $890.
3. Colorado
Colorado homeowners pay 0.51% in real-estate taxes.
The median home value in Colorado is $343,300, which means annual taxes on a home priced at the state's median value are $1,756.
2. Alabama
Alabama has the US's second-lowest real-estate tax rate, at 0.41%.
The median home value in Alabama is $142,700, meaning annual taxes on a home priced at the state's median value are $587.
1. Hawaii
Hawaii tops the list with the lowest real-estate tax rate: 0.28%.
The median home value in Hawaii is $615,300, which means annual taxes on a home priced at the state's median value are $1,715.