Property taxes in New Jersey are the highest nationwide, according to a recent that compared home and vehicle taxes across the country.
WalletHub placed New Jersey as the highest in the country in real estate taxes, with a 2.49% real estate tax rate. Homeowners will pay $8,362 in property tax on a median priced home of $335,600.
Industry experts suggest homeowners can write off some or all of their property taxes on their income taxes depending on their state’s tax rate and home value.
“Unfortunately, living in the Northeast has become a very expensive proposition if you want to own properties,” said Ralph DiBugnara, president of Home Qualified and senior vice president at Cardinal Financial on Realtor.com. “But homeowners should be aware of what they can write off when it comes to homeownership, especially in these high-tax areas.”
DiBugnara advises if a home is worth $500,000 or below, homeowners should be able to write off all of their property taxes, but if it is above $500,000 and in a state with tax rates around 2 percent, most of the time that won’t be enough of a write-off to cover all of your property taxes.
In high-tax-rate states with pricey properties, homeowners are allowed to deduct up to $10,000 of property taxes.
According to WalletHub, the average American household spends $2,471 on property taxes for their homes each year, according to the U.S. Census Bureau, and residents of the 27 states with vehicle property taxes shell out another $442. Considering these figures and the massive amount of debt in America, it should come as no surprise that more than $14 billion in property taxes go unpaid each year, according to the National Tax Lien Association.
“The situation is very different from state to state,” said WalletHub Analysis Jill Gonzalez. “All states rely on property taxes to some extent, and everybody pays them, including businesses. Those that rely on them more heavily, usually lack other taxes. So one way to reduce these taxes would be to impose others instead.”
Consumers can ask for a reevaluation of their homes if they think the value has been assessed too highly, she said.
“You can dispute your property tax,” she said “Other than that, there’s not much room for negotiation. If you’re too burdened by your property tax, you could consider moving to a state with a lower rate.”
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