The highest property taxes in the US
If you are thinking about moving out-of-state, here’s another data point to consider:
This year, Uncle Sam took his cut of the past year’s earnings on May 17, slightly later than usual due to the COVID-19 pandemic. Many taxpayers are undoubtedly wondering how this year’s Tax Day will affect their finances, as a lot of people are struggling financially as a result of the pandemic.
Since the tax code is so complicated and has rules based on individual household characteristics, it’s hard for the average person to tell how they will be impacted.
One simple ratio known as the “tax burden” helps cut through the confusion. Unlike tax rates, which vary widely based on an individual’s circumstances, tax burden measures the proportion of total personal income that residents pay toward state and local taxes. And it isn’t uniform across the U.S., either.
To determine the residents with the biggest tax burdens, WalletHub compared the 50 states across the three tax types of state tax burdens — property taxes, individual income taxes and sales and excise taxes — as a share of total personal income in the state.
The highest property taxes in the US
As we all know the Boston real estate market prices keep climbing, but so will property tax.
Boston Real Estate Taxes
Homeowners in Massachusetts face some of the largest annual property tax bills of any state in the country. The median annual property tax payment in the state is $4,899. The state’s average effective tax rate of 1.17% is higher than the national average, according to SmartAsset.
The state requires an assessment every year.
[ Census Bureau: 89,000 Mass. tenants have ‘no confidence’ they can pay rent ]
“Properties in Massachusetts do get re-assessed every year,” said Keren Horn who is an Associate Economics Professor at UMass Boston.
And she says lifelong residents will really feel that pinch.
“People who will be surprised or already may have been surprised are the long-term homeowners,” said Horn.
As home prices continue to climb plenty of people are concerned property taxes could soon follow. We asked how long it could take before some people are priced out of their own neighborhoods.
“We are getting priced out. I mean I have to think about moving in the next couple of years,” said Ferragamo.
So, what can residents do?
“Most towns have exemptions for people on fixed incomes,” said Horn.
[ Realtor: 4 things first-time Massachusetts home buyers need to do ]
That’s something to check on in your town. The city of Everett saw this and actually lowered its property tax rate to retain residents.
“They’re very aware that people are struggling they can’t make their payments… so what do they do? They responded by reducing their property tax rate,” said Horn.
But Horn says property tax is something most towns may not want to tinker with and that leaves people like Ferragamo with little choice but to move.
“I’m going to have to do what I have to do. I don’t have a choice. Or I’m going to be working for the rest of my life just to have my house,” said Ferragamo
Boston Real Estate Search
The good news: Massachusetts isn’t No. 1. The bad news: It’s No. 7, as measured by mean dollars paid per housing unit.
Guess which New England state is ranked No. 2? New Hampshire. Sure, they don’t have sales or income taxes in the Granite State. But they do have extremely high property taxes. The average rate in Massachusetts, for instance, is $3,805, while the average in N.H. is $5,230.
Who’s the worst? New York’s Westchester County at $9,647. New York and New Jersey generally seem to have the highest rates by far.
Filed under: Thank goodness for Proposition 2.5
Note: The entire Tax Policy Center study (pdf) can be found here. The screen-capture chart above via CNN Money; click on the first link to get to CNN Money’s
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