One of Two Things You Can’t Get Out Of
As Benjamin Franklin said about the permanence of our Constitution, “…in this world, nothing can be said to be certain, except death and taxes.” If Mr. Franklin were alive today, he might add more to the list, but as sayings go, his sentiment regarding the unavoidable permanence of death and taxes is “right on the money.”
That said, not all taxes are created equal. While you’re grinning and bearing the payment of your income tax this spring, it’s important to note that those taxes have little to do with where you have chosen to make your home. Further, those taxes do not get spent in accordance with your immediate location, either.
This year around tax day, you might take a moment and reflect on the one tax you pay that is based on where you live, and does mostly stay local as it is allocated: property tax.
How Property Tax Works
While there is no national standard for determining property taxes (hence the huge difference between the amount levied in the nation’s top ten most taxed areas and the rates in the least taxed counties), there are similarities in how property taxes are assessed. First of all, property tax does not just apply to real estate. There are portions of the country where people are required to pay property tax on personal property, as well.
For this post, we will focus on property taxes, or as some areas call it, mileage rate, only as it applies to real estate. Generally speaking, property tax is almost always computed by taking the fair market value of the real estate in question, together with any permanent structures on it, and multiplying that figure by an assessment ratio and then a local tax rate. Values are typically determined by the governing body (usually the county), and have been known to be a source of some dispute.
The Nation’s Ten Most Heavily Taxed Areas
The suburbs of Manhattan in New York, and the city’s other suburbs in the northern part of New Jersey, have the highest general property taxes of anywhere in the country.
The Nation’s Ten Most Heavily Taxed Counties:
- Westchester County, NY $9,647
- Nassau County, NY $9080
- Bergen County New Jersey $8,893
- Hunterdon County, New Jersey $8,764
- Rockland County, NY $8,762
- Essex County New Jersey $8,541
- Morris County New Jersey $8,165
- Somerset County, New Jersey $8,058
- Passaic County New Jersey $8,047
- Union County, New Jersey $7,944
The Ten Lowest Property Tax Areas in the U.S.
For the nation’s lowest general property tax rates, you’ll have to travel several hundred miles south of New York City, to the Deep South, where Alabama and Louisiana have many of the lowest property tax rates of any area in the country.
- Autauga County, Alabama $123
- Red River Parish, Louisiana $205
- Franklin Parish, Louisiana $207
- Fayette County, Alabama $209
- Marion County, Alabama $218
- St. Landry Parish, Louisiana $219
- Clay County, Alabama $220
- Sabine Parish, Louisiana $223
- Jackson Parish, Louisiana $225
- Bibb County, Alabama $225
Picking a New Home Based on Your Tax Burden
If you’re one who’s prone to shopping around and you’re currently looking to relocate, but want to make sure you’re not getting into a heavily taxed area, you’re in luck. CNN has published an interactive nation-wide property tax map that allows you to research any county in the nation. You may not be able to escape the permanence of property tax, but you might be able to minimize its impact!