Five states charge no real estate property tax at all
Alaska, Delaware, Montana, New Hampshire, and Oregon do not levy a state property tax on real estate. This means homeowners in these states pay no annual tax to the state based on their home's value. However, most of these states fund schools and services through other taxes — income tax, sales tax, or both — so the absence of property tax does not mean lower overall tax burden.
Even in these five states, you may still owe property tax to your county or local government. Alaska and Montana have no state property tax but allow counties to impose local property taxes. New Hampshire and Delaware have no property tax at all, state or local. Oregon has no state property tax but allows counties to tax real estate.
If you own a home in one of these states, check with your county assessor's office to learn whether your specific location charges local property tax. The absence of state tax does not may provide you pay nothing.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon have no state real estate property tax, though some allow counties to charge local property tax.
- New Hampshire and Delaware have neither state nor local property tax on real estate, making them the only two states with complete exemption.
- States without property tax typically fund schools and services through income tax, sales tax, or both, so overall tax burden varies widely.
- Even in states with no state property tax, your county or municipality may still charge property tax, so verify with your local assessor.
Alaska: No state tax, but counties may charge locally
Alaska has no state property tax. However, municipalities and boroughs in Alaska can and do impose local property taxes on real estate. The tax rate and what is taxed vary by location — some boroughs tax only land, others tax both land and structures, and some tax neither.
Anchorage, the largest city, does not charge property tax. Juneau does. Fairbanks does. The variation is significant, so your actual tax bill depends entirely on which borough or municipality you live in. Contact your local assessor to learn the rate in your area.
Delaware: No property tax, state or local
Delaware charges no property tax at all — neither at the state level nor at the county or municipal level. This is the rarest situation in the United States. Delaware funds its government through corporate income tax (the state is home to many incorporated businesses), personal income tax, and sales tax.
If you own real estate in Delaware, you will not receive a property tax bill from the state or any local government. You may owe other taxes — income tax on wages or business income, for example — but not property tax.
Montana: No state tax, but counties may charge locally
Montana has no state property tax. Counties, however, can and do impose property taxes on real estate. Montana's counties set their own rates, so the tax you owe depends on where in the state your property sits.
Some Montana counties have relatively low property tax rates; others are higher. Check with the county assessor in the county where you own property to learn the current rate and what is included in the tax base.
New Hampshire: No property tax, state or local
New Hampshire charges no property tax on real estate at either the state or local level. Like Delaware, this is uncommon. New Hampshire funds schools and services through a combination of income tax on dividends and interest, sales tax, and business taxes.
Homeowners in New Hampshire do not receive property tax bills. However, New Hampshire does tax income on certain investment earnings, so your overall state tax burden may not be lower than in states with property tax.
Oregon: No state tax, but counties may charge locally
Oregon has no state property tax. Counties in Oregon do impose property taxes on real estate, and rates vary by county. Oregon also has a state income tax, so residents typically pay income tax and local property tax but not state property tax.
If you own property in Oregon, contact your county assessor to learn the local property tax rate. Oregon's counties have different assessment practices and tax rates, so the amount you owe depends on your location within the state.
How property tax works in states that still charge it
In the 45 states that do charge property tax, the tax is calculated by multiplying your home's assessed value by the local tax rate, often called the millage rate. The assessed value is usually a percentage of the market value, set by the county assessor. The millage rate varies widely — from less than 0.5% in some counties to over 2% in others.
Property tax bills typically arrive once or twice per year. If you have a mortgage, your lender may collect property tax as part of your monthly payment and pay it on your behalf. If you own the home outright, you pay the tax directly to your county or municipality.
Frequently Asked Questions
Do I still owe property tax if I live in Alaska, Montana, or Oregon?
It depends on your county. These three states have no state property tax, but counties within them can impose local property tax. Contact your county assessor to learn whether your specific location charges property tax and at what rate.
Is it cheaper to live in a state with no property tax?
Not necessarily. States without property tax typically fund schools and services through income tax, sales tax, or both. Your total state and local tax burden depends on your income, spending, and location within the state, not just whether property tax exists.
Can I deduct property tax on my federal income tax return?
Yes, if you itemize deductions on your federal return. The deduction is capped at $10,000 per year for all state and local taxes combined (property tax, income tax, and sales tax). This limit has been in place since 2017.
What if I own property in two different states?
You owe property tax in the state where the property is located, based on that state's and locality's rules. If one state has no property tax and the other does, you will owe tax only in the state that charges it.
Do homeowners in no-property-tax states pay school taxes differently?
Yes. States without property tax fund schools through income tax, sales tax, or other revenue sources. The money comes from a different tax, but schools are still funded. The per-student funding and quality vary by state and district, just as they do in property-tax states.