New Jersey homeowners give up a bigger slice of their home’s value to property taxes than anyone else in America — 2.23 cents of every dollar, according to the Tax Foundation’s latest state-by-state ranking. The states with the highest property taxes follow a clear pattern: nine of the ten sit in the Northeast or Midwest, where local governments lean on real-estate taxes to fund schools, police, and roads. Here is the full top ten — and what those percentages mean in real dollars.
TL;DR: New Jersey (2.23%), Illinois (2.07%), and Connecticut (1.92%) carry the highest effective property tax rates in the U.S., per the Tax Foundation’s 2026 release. Nine of the top ten are in the Northeast or Midwest, with Texas the lone outlier — and the highest rate does not always produce the highest dollar bill.
What “effective property tax rate” actually means
The effective property tax rate is the median annual property tax actually paid by a state’s homeowners, divided by the median value of owner-occupied homes — expressed as a percentage of home value. It is the fairest apples-to-apples comparison because advertised tax rates and assessment rules differ too much across states to compare directly.
About the numbers: which data year is this?
These rankings come from the Tax Foundation’s Property Taxes by State and County, 2026, published in March 2026, built on calendar-year 2023 Census Bureau data.
The 10 states with the highest property taxes in 2026
1. New Jersey — 2.23%
The highest rate in the nation, and it is not close: about $8,920 a year on a $400,000 home. The median annual bill — $9,358 — also tops the country. Local funding structures and hundreds of overlapping levies drive it.
2. Illinois — 2.07%
The only other state above 2%: roughly $8,280 a year on a $400,000 home. Thousands of overlapping taxing districts — schools, parks, fire protection, libraries — stack their own levies. Its median bill ranks ninth nationally, at $4,558.
3. Connecticut — 1.92%
About $7,680 a year on a $400,000 home, with a median bill of $6,573. Connecticut pairs high property taxes with high rates in the other major tax categories, stacking onto an already-high overall tax burden.
4. New Hampshire — 1.66%
Roughly $6,640 a year on a $400,000 home; median bill $6,707. With no income tax and no sales tax, property taxes fund nearly all local services — light taxes on paychecks, heavy taxes on homes.
5. Texas — 1.60%
About $6,400 a year on a $400,000 home. The geographic outlier has a structural explanation: no state income tax means property taxes fund the bulk of school district budgets.
6. Vermont — 1.56%
Roughly $6,240 a year on a $400,000 home; median bill $4,550. Property taxes carry much of the state’s education funding, despite modest home values.
7. Wisconsin — 1.50%
An even 1.50%: about $6,000 a year on a $400,000 home. Like its Midwestern neighbors, Wisconsin leans on local property taxes to support schools and municipal services.
8. Nebraska — 1.46%
About $5,840 a year on a $400,000 home. Property-tax relief has been a live political debate in the state
9. Ohio — 1.43%
Roughly $5,720 a year on a $400,000 home, driven mainly by local school funding. Property-tax reform has been an active debate in Columbus.
10. Iowa — 1.40%
About $5,600 a year on a $400,000 home. owner-occupied residential rates still land Iowa in the top ten.
A clear regional pattern
Nine of the ten sit in the Northeast or Midwest. States that fund K-12 education primarily through local property taxes run systematically higher rates. Texas and New Hampshire are the exceptions: both skip the broad-based income tax, so property tax fills the gap.
The rate is not the bill
Your bill is the rate multiplied by your home’s value, so expensive homes produce big bills from modest rates. Washington State’s rate is just 0.84% — below the national average of about 1.01% — yet its median bill of $4,729 ranks seventh highest nationally. California’s 0.71% rate still yields the sixth-highest bill ($5,369). Only New Jersey tops both lists.
What homebuyers should do with this ranking
Look past the state average. The Tax Foundation’s county data shows the five most-burdened counties in America all exceed 2.95% — Camden and Salem in New Jersey, Allegany and Orleans in New York, and Menominee in Wisconsin. And weigh the whole cost of living: see where unemployment is lowest in 2026 and October 2026 gas prices
Frequently asked questions
What does “effective property tax rate” mean?
The median annual property tax paid by homeowners, divided by median home value.
Which state has the highest property taxes in 2026?
New Jersey, at 2.23% of home value — per the Tax Foundation’s 2026 release. New Jersey also has the highest median annual bill, at $9,358.
Why are property taxes so high in New Jersey?
New Jersey funds schools and most local services mainly through property taxes. Its hundreds of municipalities and school districts each set their own budgets and levies, pushing the statewide rate to 2.23%.
Why is Texas in the top 10 if it has no income tax?
That is exactly why. With no broad-based income tax, property taxes shoulder more of the funding load — especially for school districts. The 1.60% rate is the trade-off: no income tax on your paycheck, higher taxes on your home.
Does a high property tax rate always mean a higher tax bill?
No. Washington’s rate is 0.84% but its median bill ($4,729) ranks seventh nationally. California’s 0.71% rate still produces the sixth-highest bill ($5,369). Illinois has the second-highest rate but only the ninth-highest bill.
What data year are these rankings based on?
The Tax Foundation’s Property Taxes by State and County, 2026, published in March 2026 and built on calendar-year 2023 Census Bureau data. 2026-specific effective rates have not been published.
Which states have the lowest property taxes?
Hawaii is lowest at 0.27%, followed by Alabama (0.38%), Nevada (0.49%), Colorado (0.49%), and South Carolina (0.51%). Low rates do not always mean low bills.
Do all homeowners in a state pay the same property tax rate?
No. Rates are set locally — by counties, cities, school boards, and special districts — so they vary widely within a state. The five most-burdened U.S. counties all exceed 2.95%. Check your county and taxing districts.
Sources: Effective property tax rates from the Tax Foundation’s Property Taxes by State and County, 2026 (published March 2026; built on U.S. Census Bureau calendar-year 2023 data). Median annual bills from 2026 analyses of Census Bureau data.
