Retirees in These 8 States Are Being Hit Hardest by Property Taxes

By Matt Durr
mlive.com
(TNS)

For millions of retirees, living on a fixed income can be difficult, especially when it comes to paying for a place to live. Depending on where they choose to retire, property taxes on their home can cause more financial strain.

In particular, eight states stand out in terms of just how expensive those taxes are, according to FinanceBuzz. For retirees, a difference of a few thousand dollars a year can significantly affect their quality of life.

New Jersey leads the nation with the costliest property taxes, carrying an average effective rate of 2.2 percent. Homeowners there pay an estimated average of $10,570 annually, an amount comparable to a modest mortgage payment.

Illinois and Connecticut follow close behind with effective rates of 2.0 percent and 1.9 percent. Illinois homeowners typically pay between $5,000 and $6,000 annually, while Connecticut residents face bills ranging from $6,000 to $6,500.

New Hampshire relies heavily on property taxes as a primary funding source since the state does not impose income tax on wages. This results in average annual bills exceeding $6,500, supported by an effective rate of 1.8 percent.

Texas, Nebraska and New York each maintain average effective rates of roughly 1.6 percent. Bills in Texas and Nebraska typically fall between $3,500 and $4,500, while New York’s average statewide bill exceeds $5,000. Some New York counties report significantly higher totals due to elevated property values.

Wisconsin rounds out the eight states with a 1.25 percent effective rate and annual bills ranging from $3,500 to $4,000. Despite recently lowering its effective rate, the state’s overall bill amounts have remained approximately the same.

Several states offer relief programs for elderly residents.

For instance, New Jersey provides the senior freeze, ANCHOR rebates and property tax deductions for residents 65 and older, though eligibility depends on income thresholds. Illinois and Connecticut offer exemptions or deferral programs for qualifying elderly or disabled homeowners, though deferred amounts in Illinois accrue interest.

In Texas, homeowners aged 65 or older qualify for a homestead exemption and a tax ceiling for local school district taxes. In Nebraska, an income-based homestead exemption program for qualified seniors, veterans and disabled homeowners is available. Depending on the applicant’s income, benefits can provide partial relief all the way to a full exemption.

Wisconsin makes relief available through the homestead credit and a property tax deferral loan program, though deferred taxes become a lien on the property.

Experts advise retirees to consider factors beyond the initial tax rate when selecting a location. Key considerations include the stability of property assessments over time, whether exemptions automatically renew and the specific income limits tied to relief programs. Even a 1 percent increase in assessed value can translate into hundreds of dollars in additional annual costs.

Photo credit: Jenn Miranda/Freepik

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