How We Rank Property Tax by State
Property tax comparisons are tricky because raw rates don't tell the whole story. A state with a 1.5% rate applied to full market value may cost more than a state with a 2% rate applied to 60% of market value. For this ranking, we use the effective tax rate: the actual taxes paid as a percentage of the home's market value , along with the median annual tax bill based on each state's median home value.
Data reflects 2025–2026 tax year figures from the U.S. Census Bureau American Community Survey and state tax authority publications.
The 10 States With the Lowest Property Taxes
1. Hawaii: 0.29% Effective Rate
Hawaii consistently ranks as the state with the lowest effective property tax rate in the nation, at just 0.29%. Despite extremely high home values (median around $830,000), annual property tax bills average roughly $2,400, low by mainland standards. Hawaii's government relies more heavily on income and general excise taxes than property taxes.
Note: Hawaii's low rate doesn't make it cheap. The high cost of housing means your total annual housing costs can still be enormous.
2. Alabama: 0.40% Effective Rate
Alabama combines a very low effective rate with low home values, resulting in median annual tax bills around $700, among the lowest dollar amounts in the country. Alabama's constitution historically restricted property taxes, and the state remains one of the lightest property tax burdens in the South.
3. Louisiana: 0.55% Effective Rate
Louisiana offers a generous homestead exemption ($75,000 of assessed value for primary residences) that dramatically reduces effective rates for owner-occupants. The combination of low rates and the exemption keeps median bills under $1,100 per year.
4. Colorado: 0.51% Effective Rate
Colorado voters have repeatedly passed measures to limit property tax growth, including the Gallagher Amendment (now repealed) and Proposition HH. The result is an effective rate well below the national average of 1.07%, though rapidly rising home values have pushed nominal bills higher in recent years.
5. South Carolina: 0.57% Effective Rate
South Carolina offers a significant 4% assessment ratio for owner-occupied primary residences (vs. 6% for other property), plus a homestead exemption for seniors over 65. These provisions make South Carolina especially attractive for retirees.
6. Delaware: 0.58% Effective Rate
Delaware has no sales tax and modest property taxes, part of what makes it a popular retirement destination on the East Coast. County rates vary: New Castle County (Wilmington area) is higher than Sussex County (beach communities), but all are well below the national average.
7. West Virginia: 0.59% Effective Rate
West Virginia has one of the lowest effective rates east of the Mississippi. Low home values mean dollar-amount bills are also very low. Median annual taxes are around $700–$900 for most counties.
8. Wyoming: 0.61% Effective Rate
Wyoming benefits from significant mineral tax revenues that reduce the burden on residential property owners. The state assesses residential property at just 9.5% of market value, and there's no state income tax, making it a popular destination for retirees and remote workers.
9. Arkansas: 0.62% Effective Rate
Arkansas caps annual property tax increases and offers a homestead property tax credit of up to $375. Combined with low home values and modest rates, most Arkansas homeowners pay under $1,000 per year.
10. Arizona: 0.63% Effective Rate
Arizona assesses owner-occupied homes at 10% of full cash value (lower than commercial property) and limits annual assessment increases to 5%. Maricopa County (Phoenix area) and Pima County (Tucson) keep rates competitive despite strong home price appreciation.
The 5 Highest Property Tax States
For comparison, here are the states where property taxes are highest:
New Jersey: 2.23% Effective Rate
New Jersey has held the top spot for highest property taxes for over a decade. Median annual bills exceed $9,000, driven by locally funded school districts and dense municipal governments. There is no statewide property tax; all rates are set at the municipal level.
Illinois: 2.08% Effective Rate
Illinois is second highest, with Cook County (Chicago) and surrounding collar counties carrying some of the heaviest tax burdens in the country. Underfunded public pension obligations are a major structural driver of high rates.
Connecticut: 2.02% Effective Rate
Connecticut assesses property at 70% of market value and has high rates in many municipalities, particularly in Hartford and New Haven counties.
New Hampshire: 1.93% Effective Rate
New Hampshire has no income tax or sales tax, so the state relies heavily on property taxes for local government and school funding. Strafford and Belknap counties carry the highest rates.
Texas: 1.80% Effective Rate
Texas also has no state income tax, and property taxes are the primary mechanism for funding local governments and school districts. Despite a $100,000 homestead exemption and recently enacted rate compression for school districts, effective rates remain among the highest in the nation.
Where Does Your State Fall?
The national average effective property tax rate is approximately 1.07%. States above that average include most of the Northeast, Texas, and parts of the Midwest. States below it are concentrated in the South, Mountain West, and Hawaii.
Keep in mind that the lowest-rate states aren't always the best value. Low rates in states with high home values can still produce large bills. And high-rate states may offer robust public services funded by those taxes. Use the property tax calculator to find the actual dollar amount for your specific location and home value.
How to Reduce Your Bill Regardless of State
No matter where you live, there are legal strategies to reduce your property tax burden. Read our guide on how to lower your property tax bill for a complete walkthrough of exemptions, appeals, and other strategies that work in any state.