New York's Not The Worst When It Comes To Property Taxes: Report

NEW YORK — Personal finance website WalletHub took its annual look at the 50 states plus the District of Columbia, to see who stands where on property taxes — and New York continues to be one of the costliest, though not in the top five.

There's one property tax that New Yorkers avoid. Unlike 27 other states, New York does not tax your car every year. The median annual vehicle property tax in the United States is $445, the WalletHub researchers said.

However, when it comes to houses, New York ranks high on WalletHub's score chart of real estate property taxes.

"The reality is you get what you pay for," Pace University Professor Vincent Barrella told Patch.

Barrella, in addition to being chair of the department of legal studies and taxation at the Lubin School of Business, is also a former mayor of Point Pleasant Beach, New Jersey, so he knows whereof he speaks. "The tax burden comes with the services these communities provide. It's all service-driven."

Looking at the WalletHub study, he pointed out that in high-property tax states such as New York, it's those taxes that provide local services, unlike for example in Florida or Hawaii where tourism accounts for the bulk of the revenue.

The question that comes up and is answered perennially in the NYC metro area, Barrella said, is why have our own school system, our own police force in a small community? The answer is: Because people are willing to pay for it.

"The people who aren't, move," he said. "It's correlated. Would I raise my kids in Mississippi and have them go to Mississippi schools instead of New Jersey schools? No."

As proof, he pointed out, "It’s not like nobody is coming in to buy houses here, like the value of properties is going down. So it must be that we are offering something of value."

WalletHub's ranking is calculated by median real estate tax payment divided by the median home price. WalletHub reports the median U.S. household has an annual income of $63,218 and owns a home valued at $217,500.

The states with higher real estate taxes than ours based on WalletHub's calculations may surprise you. While red states, in general, have lower real estate property taxes than blue states, Texas has some of the heftiest, as does Nebraska. Of course, our neighbors are in there too.

WalletHub's list of the 10 states with the highest property tax rates:

Note that New York, New Jersey and Connecticut also have the highest median property value.

That doesn't mean that New York doesn't still deserve its reputation for high taxes. In 2021, WalletHub reported that New York had the third-highest overall effective state and local tax rate, 14.08 percent, lagging only behind Connecticut and Illinois.

Where it's doing less gouging than other states, in addition to not taxing your car, is in sales and excise taxes. There the state ranked 17th. SEE: NY Has 3rd Highest Tax Rate In The Country: Report.

The calculations underpinning WalletHub's report on "2022’s Property Taxes by State" were made by dividing the median real-estate tax payment by the median home price in each state. Researchers then used the resulting rates to obtain the dollar amount paid as real-estate tax on a house worth $217,500, the median value for a home in the U.S. as of 2019 according to the Census Bureau.