States with the Lowest Property Taxes
Ranking of all 50 US states by effective property tax rate — from Hawaii's minimal burden to New Jersey's top rate. Data from the US Census Bureau's American Community Survey.
Key Takeaway
Effective property tax rates vary by more than 7x across US states — from Hawaii at approximately 0.27% to New Jersey at over 2.00%. The lowest-rate states typically rely on alternative revenue sources (tourism, natural resources, high sales taxes) to fund public services. For a $400,000 home, this difference translates to over $6,800 per year in property taxes between the best and worst states. Assessment caps, exemptions, and local levy variations mean the county level often matters more than the state average.
Complete State Rankings by Effective Property Tax Rate
The following table ranks all 50 states by effective property tax rate — the actual percentage of assessed home value paid annually, after accounting for exemptions and assessment ratios. This is a more accurate comparison than nominal mill rates. Data reflects US Census Bureau American Community Survey (ACS) 5-year estimates (2019-2023). Median home values and median taxes paid reflect owner-occupied housing units.
| Rank | State | Effective Rate | Median Annual Tax | Median Home Value |
|---|---|---|---|---|
| 1 (lowest) | Hawaii | 0.27% | $1,971 | $730,400 |
| 2 | Alabama | 0.40% | $610 | $154,400 |
| 3 | Louisiana | 0.44% | $927 | $210,700 |
| 4 | Wyoming | 0.51% | $1,380 | $269,800 |
| 5 | West Virginia | 0.53% | $701 | $132,000 |
| 6 | South Carolina | 0.54% | $1,087 | $201,000 |
| 7 | Colorado | 0.54% | $2,017 | $374,600 |
| 8 | Nevada | 0.55% | $1,697 | $307,700 |
| 9 | Arizona | 0.60% | $1,648 | $274,700 |
| 10 | Idaho | 0.63% | $1,616 | $255,900 |
| 11 | Utah | 0.63% | $1,837 | $290,600 |
| 12 | Delaware | 0.64% | $1,538 | $240,400 |
| 13 | Tennessee | 0.66% | $1,111 | $167,800 |
| 14 | California | 0.71% | $3,994 | $562,900 |
| 15 | Arkansas | 0.63% | $741 | $117,500 |
| ... (states 16-45 range from 0.74% to 1.45%) | ||||
| 46 | Ohio | 1.52% | $2,290 | $150,800 |
| 47 | Michigan | 1.54% | $2,551 | $165,300 |
| 48 | Connecticut | 1.73% | $5,853 | $338,200 |
| 49 | Illinois | 1.97% | $4,057 | $205,800 |
| 50 (highest) | New Jersey | 2.21% | $8,797 | $397,900 |
Source: US Census Bureau American Community Survey (ACS) 5-year estimates (2019-2023) US Census Bureau American Community Survey (ACS) 5-year estimates (2019-2023) Effective rate = median annual taxes paid ÷ median home value. Rates are approximations based on ACS data and differ from nominal mill rates. See individual state pages on PlainPropertyTax for county-level detail
Compiled by the Kiznis Studio research team.
What Drives Low Property Tax States
The lowest property tax states share common patterns. Hawaii funds government services disproportionately through its general excise tax (a broad consumption tax) and income taxes, reducing property tax reliance. Wyoming's mineral severance taxes on coal, oil, and gas provide substantial revenue that substitutes for property taxes. Alabama and Louisiana have historically underfunded public services, resulting in both low property taxes and lower quality public education metrics.
California's relatively low effective rate (14th nationally) despite high home values results from Proposition 13, passed in 1978, which caps assessment increases at 2% per year. Long-term homeowners can have effective rates well below 0.3% while new buyers face the full 1.0-1.1% rate on current market values. This creates significant intra-state inequality in tax burden between neighbors who purchased in different years.
Browse all state property tax pages on PlainPropertyTax for median county-level rates and tax amounts within each state.
Low Property Tax States by Region
Property tax burden varies significantly by region. The South (Alabama, Mississippi, Arkansas, Louisiana, South Carolina, Tennessee) consistently dominates the low-rate tier, reflecting a historic preference for lower government spending and higher reliance on regressive taxes like sales taxes. The Mountain West (Wyoming, Nevada, Arizona, Idaho, Utah, Colorado) also trends low, partly from extraction revenue and partly from rapid home value appreciation that outpaces tax adjustments.
The Northeast (New Jersey, Connecticut, New York, Massachusetts, Vermont) dominates the high-rate tier, driven by dense urbanization, high public school spending, and strong municipal services. The Midwest (Illinois, Wisconsin, Michigan, Ohio) also trends high, particularly in states with declining industrial tax bases where residential property carries a larger share of the total levy.
For the most detailed comparison, the property tax burden within individual states varies enormously at the county level. A state with a moderate average rate may contain both extremely low-tax rural counties and extremely high-tax urban counties. Explore county-level data for precise comparisons within states of interest.
Calculating Your Potential Tax Savings
The practical dollar impact of property tax rate differences is substantial. For a $400,000 home:
| State | Effective Rate | Annual Tax on $400K Home | vs. NJ Difference |
|---|---|---|---|
| Hawaii | 0.27% | $1,080 | -$7,760/yr |
| Alabama | 0.40% | $1,600 | -$7,240/yr |
| Wyoming | 0.51% | $2,040 | -$6,800/yr |
| Nevada | 0.55% | $2,200 | -$6,640/yr |
| California | 0.71% | $2,840 | -$6,000/yr |
| National avg. | 1.10% | $4,400 | -$4,440/yr |
| Illinois | 1.97% | $7,880 | -$960/yr |
| New Jersey | 2.21% | $8,840 | baseline |
Annual tax estimate = $400,000 × effective rate. This is illustrative only — actual taxes depend on local levies, exemptions, and assessment ratios. Use the property tax calculator for a specific estimate.
Exemptions: Further Reducing Your Tax Bill
Even in higher-rate states, exemptions can significantly reduce your actual tax bill. Homestead exemptions are the most common — these reduce the taxable assessed value of your primary residence by a fixed dollar amount or percentage. Texas offers a $40,000 homestead exemption from school district property taxes plus an additional over-65 exemption that freezes school taxes. Florida exempts $25,000 from all property taxes and another $25,000 from non-school property taxes for homesteaded properties.
Senior, veteran, and disability exemptions are available in nearly every state but vary significantly. New York's Enhanced STAR exemption reduces school tax bills for qualifying seniors by thousands of dollars annually. Massachusetts allows seniors meeting income limits to defer property taxes until the home is sold. Many exemptions require an application — they are not automatically applied. Contact your county assessor's office to check which exemptions apply in your jurisdiction and what documentation is needed.
See state and county property tax pages on PlainPropertyTax: lowest rate counties and highest rate counties.
Frequently Asked Questions
Which state has the lowest property tax rate in the US?
Hawaii consistently has the lowest effective property tax rate of any US state, averaging around 0.27-0.29% of assessed home value. This is partly because Hawaii funds schools and public services primarily through income and general excise taxes rather than property taxes, and because its high home values mean even a low rate generates substantial revenue. Alabama and Louisiana are the next lowest, both under 0.45%.
Why do some states have much lower property taxes than others?
Property taxes are determined locally, but state-level policies shape the overall burden in several ways. States with alternative revenue sources — oil severance taxes in Alaska and Wyoming, tourism taxes in Hawaii and Nevada, lottery and gambling revenue — need less from property taxes. States with strong income or sales taxes can substitute those for property tax revenue. Assessment caps (like California's Proposition 13) limit taxable values. And states with lower spending on public education, which accounts for the largest share of property tax spending in most states, tend to have lower property tax rates.
Do low property taxes mean lower overall taxes?
Not necessarily. Many states compensate for low property taxes with higher income taxes, higher sales taxes, or higher fees for services. New Hampshire has no income or sales tax but is among the highest property tax states. Tennessee has no income tax on wages and low property taxes, but a high sales tax. Wyoming has low property taxes and no income tax, but high severance taxes on mineral extraction fund state services. Always consider the full tax burden, not just property taxes in isolation.
How does California's Proposition 13 work?
California's Proposition 13 (passed in 1978) caps property tax increases at 1% of assessed value at purchase, with maximum annual increases of 2% per year regardless of market appreciation. This means a California homeowner who purchased decades ago can have a very low effective tax rate compared to a neighbor who recently purchased at a higher price. The result is that California's effective rate (0.68-0.73%) is well below the national average despite having some of the highest home values in the country. New homeowners pay market-value assessments, while long-term owners may pay a fraction of what current market values would imply.
Are there property tax exemptions that can further reduce what I pay?
Yes. Most states offer homestead exemptions for primary residences — these reduce the assessed value used to calculate taxes. Common exemptions include: homestead exemptions (20,000-50,000+ off assessed value in many states), senior citizen exemptions (available in most states, often starting at age 65), veteran exemptions, disability exemptions, and agricultural land use exemptions. Texas offers both a homestead exemption and an over-65 school tax freeze. Check your county assessor's website or state revenue department for available exemptions — many are not automatically applied and require an application.
Is it worth moving to a low property tax state to save money?
This depends on your overall financial situation and lifestyle priorities. The potential savings can be significant: a homeowner with a $400,000 home would pay approximately $1,080 per year in Hawaii (0.27%) versus $8,000 per year in New Jersey (2.00%) — a difference of nearly $7,000 annually. Over 20 years, that differential could fund significant retirement savings. However, moving costs, income tax differences, housing price differentials, cost of living, job market access, quality of public services, and personal preferences all factor in. A comprehensive tax comparison considering all state and local taxes is needed before making a relocation decision.
Explore Property Tax Data
Related Guides
Sources
- US Census Bureau — American Community Survey (ACS) 5-Year Estimates 2019-2023
- US Census Bureau — Selected Housing Characteristics (DP04) by State
- Tax Foundation — State Property Tax Comparisons
- National Conference of State Legislatures — Property Tax Exemptions
This guide is for informational and educational purposes only. Effective property tax rates are calculated from Census ACS median tax and median home value data and represent approximations. Actual tax obligations depend on local mill rates, assessment ratios, exemptions, and current property valuations. Consult your county assessor and a licensed tax professional for advice specific to your situation.
Understanding the Data
The information presented throughout this guide is informed by publicly available public records published by federal and state government agencies. Our database aggregates and standardizes these records to make them more accessible and easier to interpret for general audiences. When we reference specific statistics or trends, they are drawn directly from these authoritative sources unless explicitly noted otherwise.
It is important to understand the limitations of any large-scale data dataset. Records may contain errors from the original data collection process, some fields may be incomplete for older entries, and classification systems may have changed over time. Our analysis accounts for these factors by clearly labeling data vintage, flagging records with missing critical fields, and noting when temporal comparisons span methodology changes in the source data.
For readers who want to conduct their own research, we recommend going directly to the source whenever possible. federal and state government agencies provides detailed documentation on collection methodology, sampling frames, and known data quality issues. Our goal is not to replace primary sources but to make them more approachable and to highlight patterns that may not be immediately obvious when browsing raw records.
How We Analyze Data Records
Our analytical approach involves several steps designed to surface meaningful insights from large datasets. First, we clean and standardize the raw data, handling variations in naming conventions, date formats, and categorical labels. Then we compute summary statistics, distributions, and comparative benchmarks across relevant dimensions such as geography, time period, and category type.
Key metrics we examine include statistical records, geographic distributions, temporal trends. These indicators provide a multi-dimensional view of each entity in our database, allowing users to understand not just individual records but how they compare to peers, regional averages, and national benchmarks. We believe this contextual approach is far more valuable than presenting raw numbers in isolation.
