Westchester county takes top prize again… for paying highest property taxes in the nation!

Forbes magazine recently published an article “Where americans pay most in property taxes”.

The finding of the research (based on Census data) is thatWestchester is the nation’s highest-taxed county with median property tax bill of $8,404! Of the top 10 counties with highest taxes, 3 are from New York state (Westchester, Nassau and Rockland), and 7 are from New Jersey!

Putnam county is no so distant #11, with median tax bill of $6,917. The closest county outside of NY and NJ is Lake county in Illinois (#15 on the list) with annual tax bill of $6,052.

These findings are really not surprising, as homes in NY and NJ are pricey – in Westchester the median home value is $581,900, three times the national average, according to Census numbers – which naturally helps drive up those bills.

But there is another factor at play here: Counties in the Census-defined Northeast region tend to be carved into an array of towns, villages and municipalities that don’t derive their property taxes from state-wide levies. This results in a greater dependence on property taxes for local revenue. Because the region also has highly concentrated pockets of wealth, it takes 19 out of the top 20 spots for highest-taxed counties.

Being a researcher at heart, I have decided to “go to the source” to take a look at the bigger picture, and found The Tax Foundation – organization whose mission is to educate taxpayers about the tax policy.

The Tax Foundation website contains wealth of tax-related information (income, property, municipal etc), including a full ranking of U.S. counties by property taxes paid in 2006-08 (3-year average). This table contains the data for 1,822 counties in the United States with populations greater than 20,000 (as of July 1, 2008).

The numbers left me speechless. Of course, I knew that here in NY we pay A LOT in taxes. For the record, I pay almost twice the amount of the median Westchester tax bill (no, I don’t live in a McMansion!), and some of my clients pay 3 or even 4 times the median amount! But, there are 1,822 counties on the list, and of all 1,822 – Westchester is #1! On the other side of the equation there are counties in Louisiana with median tax bill of about $100 a year! That is a HUGE difference!

Westchester County, 2006-08 (3 years average)

Annual Property Tax: $8,404
Percentage above national average: 612
Median Household Income: $111,243
Median Home Value: $581,900

Searching for historical data, I came across an article from CNN with numbers from 2005. The Tax Foundation looked at data on 775 counties from the U.S. Census Bureau’s 2005 American Community Survey.  It seems that the same counties were leading the list back then!  Of the top 10 counties ranked by median property taxes in 2005, 5 were in New York and 5 were in New Jersey. Westchester County, ranked No. 1 with $7,337 in median property taxes paid. No. 2 was Nassau County on Long Island, with $7,025. The highest county on the list not located in either New York or New Jersey was Lake County, Ill., ranked No. 15. The median property tax paid in that county totaled $5,393.

So, the median tax bill increased since 2005 by about 20%! At the same time, as we all know, the property values went down about 20-30%! There is a disconnect here, isn’t it? Can an average homeowner do something about it?

Fortunately (and this is the only positive moment in the falling property values), property taxes can be reassessed based on the current market value.

Click here for a video explaining how to lower your property taxes.

Do you have questions about information in this post or the process of lowering your taxes? Feel free to contact me, I’ll be very happy to answer any questions your might have!

***digital photo above is by Salvatore Vuono