Ever wonder where all of your money goes? If you live in Texas, there’s reason for this sentiment. Following a report on how much debt Dallasites live with, WalletHub has released property tax statistics revealing Texas as one of the most heavily taxed states in the country.
The financial website analyzed the 50 states and District of Columbia to determine which states “pack the biggest property-tax punch.” And if you’re looking to buy a home in Texas, you may want to heed the data.
With a 1.93 percent tax rate, Texas ranks No. 47, making it one of the worst states for property taxes. That means that a house priced at $176,000 — the median home value in the U.S. — will have an annual tax cost of $3,392 in Texas, the fifth highest in the nation. WalletHub reports that the median home price in Texas is $131,400, which amounts to $2,537 in annual Texas property taxes on a home of that price.
To give some perspective, Hawaii — the best state for property taxes — has a 0.28 percent real estate tax rate, which comes out to a mere $489 in annual taxes on a $176,000 home. New Jersey — the worst state in the nation for property taxes — has a 2.29 percent real estate tax rate, which comes out to $4,029 in annual taxes.
WalletHub consulted with a panel of leading property tax experts for insight on what the data means for homeowners. Margaret McFarland, a real estate professor at the University of Maryland, warns that before you pack your bags, you should view the bigger picture.
“Looking at property taxes alone is not a good strategy,” she says. “To do a real analysis of taxes as a cost of living, all the taxes in an area would have to be considered, not just property taxes.”
And while real estate taxes might be taking a toll on Texas wallets, we can count our blessings that our state has no vehicle property tax or income tax. This raises real estate taxing, but it does reduce the overall taxes we pay each month. See, don’t you feel better?