Moving to these 5 states could see your property taxes skyrocket

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Do not act without checking this list.

Key Point

• Property taxes are additional costs that homeowners must prepare for and vary by state.
• States with high property taxes include New Jersey, New Hampshire, and Connecticut.

When buying a home, you need to plan for more than just the mortgage principal and interest payments. You should also be prepared to cover property taxes as well.

Some mortgage lenders require you to add property taxes to your mortgage payment. In that case, they keep the money in escrow and pay the bills when they are due. However, even if your lender doesn’t require this, you should be prepared to pay annual property taxes.

It is important to be aware that there is a lot of variation in tax rates across the United States as you should be prepared to cover property taxes. Also, residents of some states face a much higher tax burden than others.

In fact, if you live in or move to any of the following five states, you can expect to pay taxes at very high rates.

1. New Jersey

New Jersey residents, on average, pay more property taxes than individuals living elsewhere in the country. According to the Tax Foundation, New Jersey residents pay an average of 2.21% of the value of their home in property taxes each year.

New Jersey is one of two states with an effective property tax rate greater than 2.00%. It’s also more than double the effective tax rate of 1.08% paid by homeowners nationwide.

2. Illinois

Illinois is the second of two states with an effective property tax rate above 2.00%, tied with New Jersey. The Illinois resident pays her 2.05% of the home price. This is based on 2020 data from the Tax Foundation.

Illinois has a very high property tax rate and this is because Chicago residents pay a lot of these taxes for their pension obligations. In Chicago alone, she has eight pension funds and nearly $45 billion in debt. And across Illinois, the government has $63 billion in total pension debt that residents have to pay.

3. New Hampshire

New Hampshire is third on the list of states with hefty property taxes that homeowners must pay each year. New Hampshire’s effective property tax rate is 1.96%.

4. Vermont

Vermont residents also face a significant property tax burden. The effective tax rate is his 1.82% of Vermont home prices.

5. Connecticut

Finally, in Connecticut, residents pay an effective tax rate of 1.76% on the home value. The Tax Foundation also found that a Connecticut homeowner pays 20% more in taxes as a percentage of the home value than a resident in neighboring New York, and he pays 50% more in taxes than a Massachusetts homeowner. I also found

Property tax rates are expected to be particularly high when moving to these five locales. But no matter where you live, taxes should be taken into account when determining how much you can afford to buy a home.

These taxes can add a lot to your monthly housing costs, and many renters don’t realize how much they can add up when they start shopping. Then, be sure to research these costs so that you can make an informed choice as to whether the home you’re considering is affordable.