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How Property Taxes in Texas Compare to Other States

Property taxes are constantly brought up as a topic of discussion within Texas politics. Due to Texas’s high property tax rates, Texas lawmakers and residents often wonder if property taxes are too high in comparison to other states. While property taxes may seem higher, there are other factors to consider. In this blog, we will address why Texas has high property taxes and determine if they are actually as high in comparison.

Property Taxes in Texas

With Texas mainly relying on property taxes to fund crucial services for its local governments, including public schools and libraries, road management, public safety, and other vital programs, these taxes tend to be higher compared to other states. On average, Texas’s property tax rate is 1.74%, making it the 6th highest rate in the nation. More specifically, property taxes are calculated based on the county you live in, depending on certain factors such as size, location and condition. If you want to determine the average of your property taxes, you can calculate your home value and multiply it by 1.74%. For instance, if your home is valued at $200,000, your property taxes would average at $3,480 for the year.

Texas Property Taxes Compared to States with Low Property Tax Rates

There is no doubt that Texas has a high property tax rate. However, Texas does not have state income tax, and Texas home values are considered lower than many other states. Meaning some states require slightly less property tax payments but usually make up for it in income tax or higher priced homes. Here are the five states with the lowest average property tax rates in 2023:

1. Hawaii – 0.29%

2. Alabama – 0.41%

3. Colorado – 0.51%

4. Nevada – 0.55%

5. Louisiana – 0.56%

After taking a look at these five states, you might immediately think those rates are the most ideal. However, there is a reason why those property tax rates are so low. Take Hawaii for example. It has the lowest property tax rate but has state income tax and also has the highest state median home value of $662,100. Compared to Texas, where it has a lower median home value and does not collect income tax.

Texas Property Taxes Compared to States with the Highest Property Tax Rates in 2023

Here are the five states with the highest property tax rates in 2023:

1. New Jersey – 2.47%

2. Illinois – 2.23%

3. Connecticut – 2.15%

4. New Hampshire – 2.09%

5. Vermont – 1.90%

With the exception of New Hampshire, each of these states have a slightly higher property tax rate compared to Texas, while also having state income tax. Not only does New Jersey have the highest property tax rate and pay state income tax, its state median home value is high, at $335,700. So, residents are paying much more in total to live in these states compared to Texans.

Is Texas Considered a High Tax State?

In terms of property taxes, Texas is considered a high property tax state. Yet when other factors are calculated in, such as income tax and median home values, Texas’s overall taxes in total are not as high as they seem. If you take an even closer look into Texas’s taxes, its overall tax burden is one of the lowest percentages. According to Tax Foundation, Texas has a state-local tax burden of 8.6% for calendar year 2022, ranked 6th out of 50 states. For a better understanding on tax burden and overall state tax percentages, click the link. https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/

Need Help Paying Your Property Taxes?

Although Texas’s overall tax burden is not high, that doesn’t alleviate the stress of being hit with a high property tax bill at the end of each year. Instead, Texans are often caught off guard by how much their property tax bill costs, causing them to struggle to pay it on time. If this has happened to you, the Johnson & Starr team can help. We will immediately pay the entire tax bill on your home or property and set up a flexible repayment plan that fits your needs. Call us today at 888-508-3894 to learn more about a Johnson & Starr property tax loans and how we can help.