States with the Highest Property Taxes

Source: 2006 American Community Survey, Tax Foundation Calculations

According to the Tax Foundation, which compiles data based on 2006 figures, residents in the Northeast are still paying the most in taxes. New Jersey topped the list once again for the 2006 year. Some of the homeowners who live in this state pay as much as $6,000 more than the national average on a yearly basis. New Hampshire and Connecticut also have exceptionally high medians.

Taxes are high in the ten states mentioned above for two main reasons: property values are higher and tax rates are higher in these regions than in other parts of the country. New York, New Jersey and Connecticut are notorious for high taxes. California, on the other hand, has low taxes, but the highest property values in the country.

States with the Lowest Property Taxes

Source: 2006 American Community Survey, Tax Foundation Calculations

The Tax Foundation data shows that states with lower property values have one thing going for them: lower taxes. The median property tax in Louisiana is only $179--over $5,500 less than the New Jersey median.

Besides more modest home values, a lower per capita income and a lower tax rate are two other reasons why so many of the Southern states pay less in property taxes than other states in the U.S.

Falling Taxes?

For the most part, the real estate property taxes paid during 2006 were based on assessments made during the boom. Back then, prices were skyrocketing and property values were at an all time high in every state in the country.

With property values falling across the nation, property taxes should start falling as well. It is likely, however, that most government entities will hold back on re-assessments unless specifically requested.

Therefore, homeowners should contact the proper tax authority to ask a new assessment if there has been a negative change in area home values.