How Property Taxes Impact Your Buying Power
When estimating home affordability, many buyers focus entirely on mortgage interest rates. However, in states with high property tax rates (millage rates), your annual tax bill can cost more than your actual loan interest, dramatically eroding your home equity.
Here are the top 5 US states with the highest property tax rates in 2026:
- 1. New Jersey: The highest in the nation. Average effective property tax rate of 2.49%, resulting in average bills exceeding $9,000 annually.
- 2. Illinois: An average effective property tax rate of 2.23%, driven by local government funding requirements.
- 3. New Hampshire: An average rate of 2.05%. While the state lacks a personal income tax, it offsets this by levying high property taxes.
- 4. Texas: An average effective rate of 1.74%. Similar to New Hampshire, Texas has zero state income tax but high local property assessments.
- 5. Wisconsin: An average rate of 1.73%, placing a significant annual burden on dairy farmers and rural property owners.
Try the Live Top 5 Millage Rates by State
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