Property Taxes by State and County, 2026
Property taxes are the primary tool for financing local governments. In fiscal year 2023, property taxes comprised 28.9 percent of total state and local tax collections in the United States, more than any other source of tax revenue, despite being levied almost exclusively at the local (not state) level. Local governments rely heavily on property taxes to fund schools, roads, police departments, fire and emergency medical services, and other services associated with residency and property ownership. Property taxes accounted for 70.0 percent of local tax collections in fiscal year 2023.
Some states with high property taxes, like New Hampshire and Texas, rely heavily on them in lieu of other major tax categories. This often involves greater devolution of authority to local governments, which are responsible for more government services than they are in states with greater reliance on state-level revenues like income or sales taxes. Other states, like New Jersey and Illinois, impose high property taxes alongside high rates in the other major tax categories.
While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services (e.g., K-12 education, local surface roads, police and fire service, and parks). As Joan Youngman argues, a well-designed property tax, despite being the target of frequent political attacks, can be considered a good tax since it is usually transparent, simple, and stable, satisfying most of the principles of sound tax policy. Property taxes also tend to be more economically efficient than alternative sources of tax revenue. Although several states have recently discussed property tax repeal, the tax’s efficiency means that attempts to eliminate it and replace it with other sources of revenue are less conducive to economic growth than keeping the tax in place.
