A recent Wallethub study confirms what many have thought – Texas has some of the highest property tax rates in the nation.
Texas ranks seventh in the nation for the highest real estate property taxes. According to Wallethub, the average American homeowner pays $2,375 in property taxes each year; the average Texan homeowner pays $2,922.
State Sen. Paul Bettencourt says he and other state legislators are aware that property taxes are too high.
"In some cases, we actually peaked out as the third-highest (property) tax rate state in the nation, chasing Illinois and New Jersey – and those are states that you don't want to be chasing," Bettencourt told KTRH. "That's why in the last legislative session we passed Senate Bill 2 and House Bill 3, which really start taking tax rates down as values go up."
Bettencourt predicts that Texas' ranking will improve as the property tax relief package introduced last year takes effect over the next few years.
Senate Bill 2 and House Bill 3 gave taxpayers a 7+ penny reduction on the school property tax rate in 2019. For a median-priced home, this could result in savings of $1,000 in property taxes by 2024.
Luckily, Texans save in another way. Texas is one of 23 states with no vehicle property taxes, which means the private use of automobiles is not charged in the state of Texas.
Texas also does not assess an income tax.
WalletHub compared U.S. Census Bureau data for the 50 states and Washington, D.C., to determine the property tax rankings. It divided the median real estate tax payment by the median home price in each state to produce an effective real estate tax rate. It used the resulting rates to determine the amount paid as real estate tax on a house worth $204,900, the median value for a home in the U.S. as of 2018, according to the Census Bureau.
Hawaii has the lowest property taxes in the U.S., while New Jersey had the highest, the report said. The tax on a $205,000 home in Hawaii are an estimated $560. The tax on a home of the same value in New Jersey are an estimated $5,064.