For homeowners in the Northeast, property taxes are a significant financial consideration, often ranking among the highest in the country. While property tax rates vary significantly by county, the differences between states like Pennsylvania, New Jersey, and New York are stark and worth understanding, especially for those considering a move, investment, or simply evaluating the long-term cost of homeownership.
Pennsylvania: Moderate Rates with Local Variability
Pennsylvania offers relatively moderate property tax rates compared to its neighbors. The median annual property tax in the state is $2,223, based on a median home value of $164,700. This works out to an average effective property tax rate of 1.35%, placing Pennsylvania 13th in the nation for property taxes as a percentage of income.
However, these numbers don’t tell the whole story. Pennsylvania property taxes are determined at the county level, meaning your tax bill could differ dramatically depending on where you live. For example:
- Chester County collects the highest property taxes in the state, with an average of $4,192 per year, or 1.25% of the median home value.
- Forest County has the lowest average property tax, coming in at just $860 annually, or 1.08% of median home value.
This county-level control makes it essential for Pennsylvania homeowners and prospective buyers to research local rates before purchasing property. While the state’s overall tax burden is mid-range nationally, local differences can be substantial, and could significantly impact your long-term financial planning.
New Jersey: The Highest in the Nation
If you own a home in New Jersey, you likely already know that property taxes here are the highest in the country. The median annual property tax is $6,579, based on a median home value of $348,300. That works out to an effective tax rate of 1.89%, making New Jersey first in the nation for property taxes as a percentage of income and home value.
To put that in context, the average New Jersey homeowner pays more than three times the amount paid by their counterpart in Pennsylvania.
Like Pennsylvania, property taxes in New Jersey are assessed and collected at the county level, resulting in wide disparities between regions:
- Hunterdon County levies the highest average property tax at $8,523 per year, or 1.91% of median home value.
- Cumberland County collects the lowest, averaging $3,744 annually, though with a higher rate of 2.13% due to lower property values.
These high taxes are partially due to the state’s heavy reliance on local property taxes to fund public schools and municipal services. For homeowners, this means higher monthly mortgage payments (especially if property taxes are escrowed), and for buyers, it can significantly affect affordability, even for modest homes.
New York: High Taxes, Especially in Certain Counties
New York also ranks among the states with the highest property taxes, though not quite at New Jersey’s level. The median annual property tax in New York is $3,755, based on a median home value of $306,000. The average effective tax rate is 1.23%, placing New York fourth in the nation for property taxes paid and sixth for property taxes as a percentage of income.
As in Pennsylvania and New Jersey, property tax rates in New York vary by county:
- Westchester County, just north of New York City, levies the highest property taxes in the state—$9,003 annually, or 1.62% of the median home value.
- Lawrence County in the north collects the lowest, at $1,674 annually, despite a higher rate of 2.1%, due to significantly lower property values.
Strong real estate markets and the costs of local services and school districts drive the relatively high taxes in counties like Westchester and Nassau. In contrast, rural counties may have higher rates but much lower assessed property values, which reduces the overall tax burden.
Key Takeaways for Homeowners and Buyers
If you’re comparing property ownership in Pennsylvania, New Jersey, or New York, here are a few points to consider:
New Jersey has the highest overall property tax burden and good public services, but at a serious cost.
Pennsylvania offers a more moderate and manageable tax structure, though you should research county-specific rates before buying.
New York falls between, with pockets of extremely high taxes and other areas with more reasonable burdens—again, location matters.
No matter where you live, property taxes are a critical part of the cost of homeownership. Understanding your local tax rate, how assessments are made, and how your tax dollars are used can help you make more informed decisions about buying, budgeting, and planning for the future. Contact your Stephano Slack tax manager/partner at 610-687-1600 or taxinfo@StephanoSlack.com to discuss your situation.
Author Olympia Z. Anagnostou, CPA, is dedicated to helping clients achieve significant tax savings. As a tax manager at Stephano Slack, Olympia works closely with small business owners and individuals to develop customized tax planning strategies that help them keep more of their hard-earned money. Contact Olympia at 856-489-0222 ext. 3414 or oanagnostou@stephanoslack.com to discover how effectivetax planning can benefit you.
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