California ranks among the states with the highest property taxes in 2026, according to a new report from personal finance website WalletHub that analyzed tax burdens across the country.
The comprehensive study examined both real estate and vehicle property taxes nationwide, revealing significant variations that impact homeowners and renters alike. While California’s effective real estate tax rate of 0.7% places it 17th lowest in the nation, the state’s high property values mean residents still face substantial tax bills.
“Every penny counts,” WalletHub analyst Chip Lupo told The Center Square. “If you’re looking at relocating, it’s a good idea to not just focus on the home price, but take a look at how much your property taxes are going to be, because that’s going to be part of the overall mortgage bill for the next 30 years of your life.”
The study found Hawaii has the nation’s lowest effective real estate tax rate at just 0.27%, though the state’s extremely high median home value of $839,100 means residents still pay around $2,239 annually in property taxes. At the opposite end, New Jersey leads with a 2.11% rate, resulting in annual property taxes of $9,590 for the average homeowner.
For vehicle property taxes, California ranks 28th with a 0.65% rate, while 24 states and Washington D.C. don’t tax vehicles at all. Virginia imposes the highest vehicle tax rate at 3.97%, costing owners of a typical $29,100 Toyota Camry about $1,156 annually.
“The average U.S. household pays $3,119 per year in property taxes on their home, according to the U.S. Census Bureau, and residents in the 26 states that levy vehicle property taxes pay an additional $499 annually,” according to WalletHub’s report.
Property taxes impact nearly everyone, even the 35% of households that rent, as these costs influence rental prices and help fund state and local governments. For commercial real estate investors, property tax rates significantly affect operating expenses and asset valuations across markets.
Experts note that property taxes by state may shift as policymakers debate tax reforms and as property values continue to adjust in the post-pandemic landscape. Some are urging lawmakers to reconsider how property types are taxed and how rates are calculated to balance fairness with stable municipal revenue.
Recent Comments