Michigan Ranks 22nd for Lifetime Property Tax – Below the US Average

Article courtesy of Ahad&Co CPAs

New Jersey residents pay the most property taxes, with an estimated $375,683 paid by the average homeowner over their lifetime.
Connecticut and New York rank second and third, paying an average of $261,908 and $259,325 in lifetime property taxes, respectively.
Alabama homeowners pay the lowest lifetime property taxes, averaging $26,724.
Michigan ranked 22nd in America for lifetime property tax.

New data has revealed that New Jersey residents pay America’s highest lifetime property taxes.

The study, conducted by certified public accountants Ahad&Co CPAs, analyzed median annual property taxes, the average age of first-time buyers, and the estimated life expectancy of residents to determine which states have the highest and lowest lifetime property tax costs.

New research has ranked Michigan 22nd in America for lifetime property tax. The average Michigan homeowner will pay $105,265 across 37 years of ownership – around 10% below the national average of $117,346. Michigan records the 12th-highest annual rate in the study at 1.07%, but falls into the bottom half on lifetime cost because its median home price of $265,700 is among the lowest in the country. By comparison, top-ranked New Jersey homeowners pay $270,418 more over a lifetime.

According to the data, New Jersey spends the most on lifetime property taxes. With an average annual property tax of $9,163 and a life expectancy of 79, the typical homeowner will pay $375,683 over their lifetime. This is 220% higher than the national average of $117,346. With the median first-time homebuyer age in the U.S. at 38, the typical New Jersey homeowner pays this amount over 41 years.

Connecticut homeowners rank second, paying an average of $261,908 in lifetime property taxes. The state also has a life expectancy of 79 years old. However, the average annual property tax amount is $6,388, paid over 41 years.

New York is in third place, with an average lifetime property tax amount of $259,325. The median house price in the state is $519,500. With an annual property tax rate of 1.22%, New York homeowners can expect to pay an average of $6,325 annually across 41 years.

New Hampshire ranks fourth, with an average lifetime property tax of $251,400. Homeowners in the state pay $6,285 annually on average across 40 years.

Massachusetts follows closely in fifth place. Homeowners in the state will pay an average of $5,821 annually across 41 years, bringing their lifetime property taxes to $238,661.

California ranks sixth. Homeowners in the state will pay an average of $204,560 in lifetime property taxes across 40 years.

Illinois ranks seventh, the state’s life expectancy of 77 means that the average homeowner can expect to pay $198,471 in lifetime property taxes across 39 years.

Vermont ranks eighth for the highest property taxes. Homeowners pay an average of $4,851 annually, totaling $194,040 in lifetime property taxes.

In ninth place is Rhode Island. Homeowners in the state will pay an average of $185,760 in property taxes across 40 years.

Washington rounds out the top 10. The average lifetime property tax amount in the state is $179,120.

Alabama was found to have the lowest lifetime property taxes, with $786 annually expected to be paid across 34 years, bringing the average lifetime property taxes in the state to $26,724. This is 77% lower than the national average amount of $117,346.

The 10 states that pay the highest lifetime property taxes

Rank	State	Lifetime property tax
1.	New Jersey	$375,683
2.	Connecticut	$261,908
3.	New York	$259,325
4.	New Hampshire	$251,400
5.	Massachusetts	$238,661
6.	California	$204,560
7.	Illinois	$198,471
8.	Vermont	$194,040
9.	Rhode Island	$185,760
10.	Washington	$179,120

Commenting on the findings, Ahad Ali, CEO of Ahad&Co CPAs said:

“Owning property is not an easy achievement, it can take years of saving and when you do own property, it’s something that should be celebrated.

“However, all too often, homeowners may forget to consider property tax when purchasing a property. For some in states particularly on the East Coast such as New York, New Jersey and Connecticut, lifetime property taxes are extraordinarily high. Without the right financial planning, this can quickly become a financial burden.

“This will be particularly pertinent for those states mentioned. From this study, we can see that homeowners in New Jersey will pay 14 times more than a homeowner in Alabama, which is an extraordinary disparity. If you’re choosing to relocate to a different state, this study will serve as a guide as to where your taxes are going to skyrocket and where you can retain some of your money.”

Sources:

Redfin

CDC

The National Association of Realtors

Methodology:

Data on the average home sale price in each state was obtained from Redfin. This was compared with the average property taxes paid in each state to reveal the property tax rate. The life expectancy in each state was obtained from the CDC, and the average age of a first-time homebuyer, established by the NAR to be 38, was subtracted from each state’s life expectancy to reveal the number of years for which the average homeowner in each state must pay property taxes.

The lifetime property tax rate was calculated by multiplying the median annual property tax amount by the number of years the average homeowner pays property taxes. The most recently available data was used for each factor. Life expectancy is circa 2021, taxes paid are circa 2023, and home prices and first-time buyer age are circa 2024.

Calculations do not consider the estimated change in property value in each location year-on-year. All amounts are also in current dollars and not adjusted for a projected inflationary value.

Life expectancy was rounded down to the nearest whole year. The rationale for this is that property tax is charged annually, and the last time a homeowner would pay their tax would be the last full year of their life. For example, if a homeowner lived to the average life expectancy of 79.9 years in Hawaii, then the last time they paid property tax would have been at age 79 and not at age 80.

All 50 states ranked from the highest to lowest lifetime property taxes

Rank	State	Lifetime property tax payment ($)	Median annual property tax ($)	Average life expectancy	Estimated number of years to pay property taxes	Annual property tax rate as % of current median sale price	Median house sale price ($)
1.	New Jersey	375,683	9,163	79	41	1.70%	538,800
2.	Connecticut	261,908	6,388	79	41	1.39%	459,800
3.	New York	259,325	6,325	79	41	1.22%	519,500
4.	New Hampshire	251,400	6,285	78	40	1.25%	504,700
5.	Massachusetts	238,661	5,821	79	41	0.90%	645,400
6.	California	204,560	5,114	78	40	0.59%	869,800
7.	Illinois	198,471	5,089	77	39	1.76%	289,500
8.	Vermont	194,040	4,851	78	40	1.16%	418,900
9.	Rhode Island	185,760	4,644	78	40	0.90%	514,400
10.	Washington	179,120	4,478	78	40	0.66%	674,500
11.	Texas	158,138	4,274	75	37	1.23%	347,900
12.	Maryland	153,504	3,936	77	39	0.77%	513,000
13.	Oregon	146,250	3,750	77	39	0.72%	520,300
14.	Wisconsin	139,698	3,582	77	39	1.10%	325,800
15.	Nebraska	137,397	3,523	77	39	1.22%	288,800
16.	Alaska	133,848	3,718	74	36	0.94%	394,100
17.	Minnesota	132,840	3,321	78	40	0.91%	365,100
18.	Pennsylvania	119,738	3,151	76	38	0.99%	319,300
19.	Iowa	110,253	2,827	77	39	1.17%	242,300
20.	Maine	109,668	2,886	76	38	0.70%	414,200
21.	Florida	106,134	2,793	76	38	0.65%	432,500
22.	Michigan	105,265	2,845	75	37	1.07%	265,700
23.	Virginia	104,652	2,754	76	38	0.60%	460,100
24.	Kansas	104,348	2,746	76	38	0.95%	287,900
25.	Utah	103,400	2,585	78	40	0.42%	619,600
26.	South Dakota	103,056	2,712	76	38	0.80%	339,600
27.	Colorado	101,556	2,604	77	39	0.39%	662,600
28.	Ohio	99,144	2,754	74	36	1.08%	255,100
29.	Montana	98,346	2,658	75	37	0.49%	540,700
30.	North Dakota	95,745	2,455	77	39	0.83%	297,400
31.	Hawaii	93,603	2,283	79	41	0.24%	946,100
32.	Georgia	85,788	2,383	74	36	0.62%	386,500
33.	Idaho	81,939	2,101	77	39	0.43%	491,800
34.	Nevada	75,369	2,037	75	37	0.41%	499,400
35.	Missouri	68,652	1,907	74	36	0.70%	273,600
36.	North Carolina	67,680	1,880	74	36	0.48%	389,800
37.	Arizona	67,007	1,811	75	37	0.39%	461,200
38.	Wyoming	66,341	1,793	75	37	0.38%	471,000
39.	Delaware	65,170	1,715	76	38	0.43%	400,000
40.	New Mexico	59,815	1,709	73	35	0.43%	394,600
41.	Indiana	59,292	1,647	74	36	0.63%	261,000
42.	Oklahoma	54,162	1,593	72	34	0.65%	246,500
43.	Kentucky	51,816	1,524	72	34	0.56%	270,800
44.	Tennessee	48,280	1,420	72	34	0.36%	396,600
45.	South Carolina	43,260	1,236	73	35	0.31%	402,500
46.	Louisiana	39,712	1,168	72	34	0.47%	248,200
47.	Mississippi	37,664	1,177	70	32	0.46%	257,000
48.	Arkansas	35,292	1,038	72	34	0.40%	259,700
49.	West Virginia	27,819	843	71	33	0.32%	261,100
50.	Alabama	26,724	786	72	34	0.29%	275,500