Texas rests in real estate tax ignominy, coming in fifth in WalletHub’s 2016 ranking of state property tax rates at 1.97 percent, though our media home value is the lowest of similarly taxed states at $131,400. We’re coming in behind No. 1 New Jersey (, No. 2 Illinois, No. 3 New Hampshire, and No. 4 Wisconsin. Hawaii, has the lowest property taxes in the nation, but ranks near the tippy top with median home values.
Of course, we already know that property taxes in Texas are obscene, but It’s a hard pill to swallow when we see how much we’re paying once you even the playing field. What WalletHub did was see how much taxes are paid per homeowner on a home valued at the nation’s median — $175,700.
In New Jersey, expect to pay $4,029 annually. In Illinois? $3,959. New Hampshire homeowners pay $3,698 annually. In Wisconsin, you end up shelling out $3,459 every year. And here in the Lone Star State you’ll pay a dizzying $3,392 for the privilege of owning a $175,700 home. The national average, for comparison purposes, is $2,127 annually.
Sounds pretty insane, huh? But as far as I can tell, there’s no real fix for our high property tax rate. I mean, we talk about it every year — taxes are high, and yet schools are always pinched for funds, our cities can’t keep up with infrastructure repairs, state-owned buildings are crumbling, and despite all of our good intentions, we still don’t have a functioning mass transit system (or high-speed rail).
Could our high property taxes put some people off from moving to Texas?
Yes, according to some of the experts polled by Wallet Hub. “People often consider property taxes when they decide where to retire, or if there are optional choices of state or locality relative to their work location,” says Margaret McFarland, a professor of real estate development at the University of Maryland. “Looking at property taxes alone is not a good strategy; 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.”
Of course, Texas does have other taxes. Such as the 12th highest sales tax according to the Tax Foundation:
No wonder why Oregon is so popular. Legal marijuana AND no sales taxes! Of course, only Portland has a functional mass transit system, but the city is trying desperately to cope with the tremendous population growth that has created a housing shortage.
Some municipalities in the Dallas area have tacked on a bit to fund mass transit, of course, but the growth of DART doesn’t seem to be keeping up with overall population growth.
Speaking of transit, another facet of WalletHub’s data crunch was vehicle property taxes:
You see, only half of the United States has a vehicle property tax. Also, now I know why no one in Rhode Island knows how to drive: It costs more than $1,000 in taxes to own a car! That’s a pretty big incentive to use mass or alternative transit, don’t you think?
The Big Question: How does Texas stay competitive, address its infrastructure needs, and fully fund schools without increasing our already ridiculous property tax rate?
