NCPA - National Center for Policy Analysis


February 17, 2009

Residents, of New York and New Jersey bear the heaviest property tax burdens in America, according to a new Tax Foundation study.

Using recently released Census Bureau data, researchers analyzed property tax burdens in all 788 high-population counties in the nation, comparing the results to home values and household incomes.  The findings:

  • Westchester County in New York tops the list with an average annual tax bill of $8,422.
  • It's followed closely by New Jersey's Hunterdon County ($8,224), New York's Nassau County ($8,153) and New Jersey's Bergen and Somerset Counties ($7,797 and $7,597).
  • In contrast, America's lowest property tax burdens are found in Apache County, Arizona where residents pay an average of just $133 per year.
  • It's followed by 4 counties located in Louisiana: St. Landry Parish ($139), Iberia Parish ($144), Rapides Parish ($146) and Lafourche Parish ($148).

What explains the high tax burdens?  According to researchers, areas with the highest incomes, highest real estate prices and highest government spending typically bear the heaviest tax burdens.  Additionally, roughly half of all property taxes in America go to fund public schools, making differences in school spending an important long-run driver of tax burdens.

Moreover, some analysts have predicted that the recent declines in home prices could lead to budget crises for local governments that rely heavily on property tax revenue.  If property values continue falling, there will likely be a combination of 3 policies taken by local school districts, says Gerald Prante of the Tax Foundation; they may raise property tax rates to replace the revenue, cut government spending or simply ask for more financial assistance from state and federal governments.

Source: Editorial, "America's Highest Property Taxes: New Jersey and New York," Tax Watch (Tax Foundation), Winter 2009; based upon: Gerald Prante, "New Census Data on Property Taxes on Homeowners," Tax Foundation Fiscal Fact, No. 147, September 23, 2008.


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