Property taxes can either turn a city into a homeowner’s dream or a financial burden. 

While some cities have low taxes to attract residents, others rely on high property taxes to fund public services. 

Using data from SmartAsset, this graphic shows the percentage of income spent on property taxes across various U.S. cities. 

TL;DR

• Paterson, New Jersey, has the highest property tax, which accounts for 9.8% of residents’ income. 
• Montgomery, Alabama, has the lowest property tax burden, with a 1.06% cut into personal income. 

Top 35 Cities with Property Tax Burden

Paterson tops the list of U.S. cities where homeowners pay most of their income in property taxes, with nearly 9.8% of median income going to taxes.

According to Zillow, the average home in Paterson costs around $518,377 as of 2025, which is already above the national average. 

And, in 2023, the homeownership rate in the city stood at 26.2%. This is significantly lower than the national average of 65% across the U.S.

Other cities with high burdens include Waterbury, Jersey City, and Aurora, where property taxes take a significant chunk of household income. 

Meanwhile, Northeast and older industrial cities dominate the high-burden list.

Where Property Tax Burden Is Lowest

As you can see from the table above, many low-burden cities are in the South and Southwest, where lower living costs and tax policies help keep property taxes light compared to household incomes. 

These cities have low property tax burdens because either local tax rates are modest or incomes are relatively high relative to property tax bills, so property taxes take a small share of total tax burdens.

Meanwhile, the lower tax burden doesn’t mean the lowest tax bill in dollars. 

A smaller share of income spent on taxes makes homeownership more affordable relative to earnings.

What This Means for You

Property taxes directly affect housing affordability. 

Even when home prices are reasonable, high property taxes can significantly raise the long-term cost of owning a home and strain monthly budgets.

In low-tax cities, homeowners save more, making homeownership easier to sustain over time. 

This often allows buyers to afford larger homes or to set aside more for other expenses.

Property tax differences also influence where people decide to live. 

Many homeowners and retirees move to low-tax regions to reduce ongoing housing costs and improve financial stability.

For investors, it impacts profitability. 

Lower tax burdens can lead to higher rental returns, while high-tax cities require higher rents or long-term appreciation to justify the investment.

ELI5

Property taxes are the money homeowners pay to their city or town based on their property’s value. 

Across America, people in Paterson, New Jersey, pay the highest rate (9.8% of income). People in Montgomery, Alabama, pay the lowest (1.06%). 

Generally, many low-burden cities are in the South and Southwest, while Northeast and older industrial cities dominate the high-burden list.

Source: SmartAsset