The High Cost of Living: Why New Jersey Still Tops the Nation in Property Taxes

the staff of the Ridgewood blog

Ridgewood NJ, Property taxes are an unavoidable reality of homeownership, but where you choose to plant roots can be the difference between a comfortable retirement and a strained bank account. While taxes are rising across the United States, one state continues to hold a frustratingly familiar title.

According to the latest 2025 data from WalletHub, New Jersey remains the most expensive state in the nation for property taxes. But how does the Garden State truly compare to the rest of the country, and where can homeowners find the most relief?

New Jersey’s Tax Burden: By the Numbers

For New Jersey residents, the phrase “you get what you voted for” often comes with a hefty price tag. The state currently holds an effective real estate tax rate of 2.11%.

Here is how that breaks down for the average homeowner in 2025:

• Median Home Value: $454,400

• Annual Tax on Median Value: $9,590

• Statewide Average Bill: $10,570 (Up from $10,095 in 2024)

While these costs fund high-ranking schools and local services, the year-over-year increase is making many residents question the long-term sustainability of the “Jersey Advantage.”

The Top 5: States with the Highest Property Taxes

New Jersey isn’t alone in the “high tax” club, though it leads by a significant margin. The Northeast and Midwest dominate the list of the most expensive states for homeowners:

Rank	State	Effective Tax Rate	Tax on Median Home
1	New Jersey	2.11%	$9,590
2	Illinois	2.01%	$5,298
3	Connecticut	1.81%	$6,643
4	New Hampshire	1.66%	$6,500+
5	Vermont	1.59%	$5,800+

The “Tax Havens”: Where Homeowners Pay the Least

On the opposite end of the spectrum, some states offer a massive break to property owners. Interestingly, the states with the lowest rates often have high property values, yet the total out-of-pocket cost remains significantly lower than in the Northeast.

• Hawaii: Holds the lowest rate in the U.S. at just 0.27%. Despite a high median home value of $839,100, the annual tax bill is roughly $2,239.

• Alabama: Follows closely with a 0.38% rate.

• The Sunbelt Leaders: Nevada (0.47%), Arizona (0.48%), and Colorado (0.48%) remain top choices for tax-conscious movers.

The Bottom Line for Homeowners

“Americans who are considering moving and want to maximize the amount of money they take home should take into account property tax rates, in addition to other financial factors like the overall cost of living,” says WalletHub Analyst Chip Lupo.

Before buying your next home, it’s vital to look past the listing price. A $500,000 home in Alabama carries a vastly different monthly carry cost than a $500,000 home in New Jersey. In 2025, your zip code is the biggest indicator of your financial flexibility.

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