Homeowners in Nebraska enjoy a stable real estate market, low housing costs relative to income levels in the state, a strong and diversified economy and perpetually low unemployment. For the privilege of living in such an economically viable state, however, residents shell out a lot of money to the government. A 2014 WalletHub study found Nebraska residents to be the third-most taxed in the United States, trailing only the notoriously tax-hungry states of New York and California. Property taxes in particular can be onerous in Nebraska. The state's property tax rates are the sixth highest in the U.S.

Nebraska Property Tax Basics

Nebraska does not levy property taxes at the state level. All property taxes come from counties and municipalities, which use the money to fund public schools, police, fire departments and other local government services. Nebraskans with school-age children tolerate high taxes because they keep the schools well funded. The student/teacher ratio in Nebraska's public schools, at 9.8 to one, is the nation's second best.

Average Property Taxes in Nebraska

A Nebraska homeowner's effective property tax rate can vary greatly based on county, municipality and school district. The average rate for the state is 1.88%. The owner of a $200,000 home in Nebraska pays an average of $3,760 in property taxes.

Homeowners in the Omaha metropolitan statistical area (MSA) pay the state's highest property taxes. Sarpy County, which includes most of the Omaha suburbs south of the city, including Papillion and Bellevue, has the highest average effective property tax rate in Nebraska at 2.12%. The second-highest rate, 2.07%, is found in Douglas County, which includes Omaha proper. The school districts in Sarpy and Douglas Counties receive at least half of the property tax revenue in a given year. Not surprisingly, these two counties feature some of the most well-funded and highest-rated public schools in the state.

Nebraska residents can find the state's lowest property taxes in McPherson County, where homeowners pay an effective rate of 0.84%. Unfortunately, only a few Nebraskans enjoy these low property tax rates, as the county's population as of the 2010 U.S. Census was 539.

How Nebraska Compares to National Averages

Nebraska's property taxes are among the highest in the nation. Only five states feature higher effective property tax rates: New Jersey, Illinois, New Hampshire, Wisconsin and Texas. The difference between Nebraska's average effective rate of 1.88% and the effective rates in other states is often significant. A total of 24 states plus the District of Columbia have average effective property tax rates below 1%. Only three states have average rates above 2%. New Jersey has the highest rate at 2.29%.

How Nebraska Compares to Its Neighbors

Regionally, Nebraska's property taxes are the highest by far. Six states border Nebraska. All of them carry much lower average property tax rates. Iowa, the bordering state with the highest rate, is still much lower at 1.47%. Two of Nebraska's neighboring states, Colorado and Wyoming, rank in the top 10 for states with the lowest property taxes. Both states have average effective rates of 0.62%.

Key Takeaways

Nebraska is far from a low-tax state. Unlike many states with high taxes, however, such as New York, New Jersey and California, Nebraska does not pose the added burden of a high overall cost of living and tough regulatory environment. While its residents pay among the highest property tax rates, it is important to remember that these rates are applied to real estate prices that are much lower than the national average. Therefore, the actual dollar amount Nebraska residents pay in property taxes ranks in line with national averages. Moreover, many residents find it comforting that the state puts their tax dollars to tangible use, as evidenced by Nebraska's quality public schools and low student/teacher ratio.

Nevada Property Tax Guide

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