Morris Law Group

I can't tell you how many conversations I've had about property taxes. Other than discussing the turmoil, in Washington, real estate taxes are a perennial pain point.

If you live in a low-tax state, of course, property taxes are not an issue and you probably shouldn't read any further. But if you're in a high-tax state, the situation is perplexing.

According to a recent WalletHub survey, the states with the highest property taxes include New Jersey, Illinois, New Hampshire, Connecticut and Wisconsin.

There's a big gulf, though, between the highest and lowest-taxes states. New Jersey has the highest rate at 2.4%. Hawaii, the lowest, is at o.27%. In dollar terms, someone in New Jersey will pay nearly $8,000 a year on an median home value of $193,500. The Hawaiian would pay roughly $1,500 on a similar home.

Those numbers, though, tell very little of the whole tax story. Some states provide more money for public education than others. And you may get a lower property tax rate, but pay much more for sales and state income taxes. Also consider home prices as well. You'll pay much more for a home in Hawaii than one in Wisconsin.

There's also an income-tax consideration. You can only deduct up to $10,000 in property-tax payments under the newest tax law changes, which became effective last year. Millions are paying more than that in real estate taxes, so their total income-tax bill could be higher now.

Is it worth living in a high-tax state when there are so many alternatives? The answer is, it depends. You have to decide whether the services provided by paying local taxes are things that you need. There are other considerations as well. Here are five questions you need to ask:

1. Do you need to have good schools nearby? Typically, high property taxes pay for decent schools, since most of your tax bill goes to fund education. It costs a lot of money to hire good teachers and build facilities.
   
   
2. How much do you pay in taxes as a percentage of your income? The higher the percentage you pay in taxes, the more pain you're going to feel.
   
   
3. Is your income keeping up with tax increases? If you're getting decent raises every year, then you may not feel it.
   
   
4. Are you getting what you pay for? I know areas where taxes are high, but services are great. If you need good libraries, park districts, community colleges and other public amenities, then it may be worth it.
   
   
5. Can you afford it? Certainly this is always a consideration. If you're on a fixed income and don't get a sufficient break, then you need to make a decision.
   Ultimately, many families decide based on whether they want to stay in their homes or be close to neighbors and other relatives. It's really hard to move away from a place you love and know. In the end, the math is important, but other factors may weigh more heavily.

Ultimately, many families decide based on whether they want to stay in their homes or be close to neighbors and other relatives. It's really hard to move away from a place you love and know. In the end, the math is important, but other factors may weigh more heavily.

Article Source: Forbes.com