Property taxes are a key source of income for local governments, which use the money to fund projects such as schools, road construction, maintenance, parks and recreation programs, public transportation, and payroll for their police, firefighters, and public works departments.
Depending on where you live, you may pay a modest amount in property taxes or your tax bill could rival your mortgage. Across the United States, the average property tax bill nationwide was $4,062 in 2023, according to the most recent data from ATTOM, a real estate data firm. Property taxes increased 4.1% from 2022, after a 3% increase the previous year.
However, property taxes vary widely by county, state, and geographic region. ATTOM's data showed that the states with the lowest effective property tax rates were concentrated in the South and West, while the highest were in the Northeast and Midwest.
Key Takeaways
- Property taxes are levied by states and local governments based on the assessed value of a property's land and structures.
- If you want a big house on a lot of land, consider moving to a state with lower property tax rates.
- The highest property taxes are found mostly in cities in the Northeast and Midwest. The lowest rates are mostly in the South and West, and in Hawaii.
- Some states offer individual credits and exemptions to qualified homeowners, which can further reduce the effective property tax rate.
- Property taxes are used to pay for local services in the areas where homeowners live.
10 States With the Lowest Property Taxes
Many state governments have dispensed with property taxes, but their local governments do levy them to pay for needed local services. The lower the property tax, the better it is for homeowners' pocketbooks. The upside for homeowners, whatever rate they pay, is that they can see and understand exactly what their money funds.
If you’re curious about levels of property taxes, check the list below of the 10 best states for property taxes. The 10 best states for property taxes are those with the lowest effective rates.
Also listed are each state’s typical home value, annual taxes on a home priced at the state typical value, and median household income. These figures can help put the tax rates in context.
Sources for Figures Below
- Effective property tax rates are provided by ATTOM and are for 2023.
- Typical home values—as of June 2024—are from real estate aggregator Zillow’s Home Value Index (ZHVI), a smoothed, seasonally adjusted measure of the estimated home value for single-family homes (including condos and co-ops) across the U.S.
- Median household income figures come from the U.S. Census Bureau’s Household Income report and are for 2022.
1. Hawaii
- Effective Property Tax Rate: 0.31%
- Typical Home Value: $854,669.14
- Annual Taxes on Home Priced at State Typical Value: $2,649.47
- Median Household Income: $92,458
Hawaii had the lowest effective property tax rate in the country in 2023. It also has the highest typical home value of the 10 states on our list, which means that homeowners in this state may still be on the hook for a hefty tax bill.
The state has the five highest median household income in the U.S. However, Hawaii also has the highest cost of living—as measured by the Consumer Price Index (CPI)—of any state as of the first quarter of 2024.
2. Arizona
- Effective Property Tax Rate: 0.41%
- Typical Home Value: $434,773.02
- Annual Taxes on Home Priced at State Typical Value: $1,782.57
- Median Household Income: $74,568
Arizona boasts a low property tax rate, but home prices and cost of living hover around the median.
Plus, household income is almost exactly the median for the country as a whole ($74,568for Arizona; $74,755 for the U.S.). As a result, homeowners may still feel the bite when they receive their tax bills.
3. Alabama
- Effective Property Tax Rate: 0.42%
- Typical Home Value: $231,948.45
- Annual Taxes on Home Priced at State Typical Value: $974.18
- Median Household Income: $59,674
Alabama had both a low property tax rate and home prices that are well below the typical home value in the U.S. ($363,438 as of August, 2024), making it one of the most affordable states to be a homeowner.
It’s also one of the most affordable states to live in overall, as it had the fourth-lowest cost of living in the country in 2024. However, Alabama also had a relatively high poverty rate as of 2022, with 16.2% of its population living in poverty.
4. Delaware
- Effective Property Tax Rate: 0.43%
- Typical Home Value: $391,908.00
- Annual Taxes on Home Priced at State Typical Value: $1,685.20
- Median Household Income: $82,174
The typical home value in Delaware in 2024 was not far from the U.S. average. Delaware also has a higher cost of living across all categories, except for utilities and housing.
However, the state has a moderate poverty rate of 9.4% in 2022. Yet, it also had a higher median household income in 2022 than most on this list. As an added bonus, the state has no sales tax.
5. Tennessee
- Effective Property Tax Rate: 0.44%
- Typical Home Value: $325,652.87
- Annual Taxes on Home Priced at State Typical Value: $1,432.87
- Median Household Income: $65,254
Tennessee boasts the 10th lowest cost of living in the nation. However, the median household income was almost $10,000 lower than the median income for the U.S.
In addition, Tennessee's poverty rate (13.3%) exceeds the median U.S. poverty rate (11.5%). Plus, the typical home price isn't much lower than the median for the country as a whole.
6. Idaho
- Effective Property Tax Rate: 0.44%
- Typical Home Value: $460,955.19
- Annual Taxes on Home Priced at State Typical Value: $2,028.20
- Median Household Income: $72,785
Home prices in Idaho are almost three times higher than prices in West Virginia, the state with the lowest-priced real estate on our list. Cost of living is also significantly higher; in the U.S. Census Bureau's ranking, Idaho is 30th out of 50 states, the District of Columbia, and Puerto Rico.
Median household income comes in slightly below average for the nation, as does the poverty rate (10.7%).
7. Utah
- Effective Property Tax Rate: 0.45%
- Typical Home Value: $522,732.31
- Annual Taxes on Home Priced at State Typical Value: $2,352.30
- Median Household Income: $89,168
While its effective tax rate was relatively low, Utah has a high typical home value figure. On the plus side, the median household income in the state was also on the higher side in 2022. The state also has a relatively low poverty rate at 8.2%.
8. Nevada
- Effective Property Tax Rate: 0.48%
- Typical Home Value: $443,102.97
- Annual Taxes on Home Priced at State Typical Value: $2,126.89
- Median Household Income: $72,333
Nevada's effective tax rate, though in the upper range for the states on this list, is still attractive compared to the majority of states. Yet its typical home value figure is also on the high side. Therefore, the annual tax amount owed shouldn't come as a surprise. Still, its cost of living is considered moderate.
9. Colorado
- Effective Property Tax Rate: 0.48%
- Typical Home Value: $551,281.10
- Annual Taxes on Home Priced at State Typical Value: $2,646.15
- Median Household Income: $89,302
The effective property tax rate in Colorado is low, but higher home prices mean higher annual property on a typically priced home—the highest tax burden dollar-wise of any state on our list.
Colorado’s median household income is the second-highest on our list, which may make that tax bill seem a bit more affordable. At 9.4%, the state had one of the lowest poverty rates in the U.S. in 2022.
10. West Virginia
- Effective Property Tax Rate: 0.49%
- Typical Home Value: $169,441.39
- Annual Taxes on Home Priced at State Typical Value: $830.26
- Median Household Income: $54,329
West Virginia’s low effective property tax rate and modest home prices can make for the lowest housing costs in the country. In 2024, the state’s overall cost of living is among the 10 best in the country. Conversely, at 17.9%, West Virginia’s poverty rate was notably higher than most in 2022.
Frequently Asked Questions (FAQs)
What 10 States Have the Lowest Property Taxes?
According to ATTOM, the 10 states with the lowest property taxes as of 2023 are Hawaii (0.31%), Arizona (0.41%), Alabama (0.42%), Delaware (0.43%), Tennessee (0.44%), Idaho (0.44%), Utah (0.45%), Nevada (0.48%), Colorado (0.48%) and West Virginia (0.49%).
What 10 States Have the Highest Property Taxes?
According to ATTOM, the 10 states with the highest property taxes as of 2023 areIllinois (1.88%), New Jersey (1.64%), Connecticut (1.54%), New York (1.46%), Nebraska (1.46% percent), Ohio (1.37%), Pennsylvania (1.33%), Vermont (1.29%), Kansas (1.26%) and New Hampshire (1.25%).
Are There Any States With No Property Taxes?
Municipalities in all 50 states and the District of Columbia levy property taxes. Some people may qualify for a property tax exemption. For example, some states offer homestead exemptions, while others offer exemptions for older homeowners, people with disabilities, military veterans, or homeowners who make certain renovations or install renewable energy systems.
The Bottom Line
Property taxes are levied by local governments in every state of the nation. Our list of the best states for property taxes sheds some light on where you'd pay the least amount of taxes.
Depending on where you live, you may qualify for a property tax exemption offered by your state, county, or local jurisdiction. For example, some states offer a homestead exemption, where tax is levied on only a certain portion of your home’s value if you meet certain age or income requirements, or following the death of a spouse or a declaration ofbankruptcy.
Other types of exemptions or tax breaks may be available for older homeowners, people with disabilities, military veterans, and homeowners who do certain renovations or install renewable energy systems, such as solar panels.
These discounts don’t automatically show up on your tax bill. It’s important to ask the agency that collects your property tax to find out if you’re eligible for tax relief.
