Five states charge no property tax at all
Hawaii, Alabama, Louisiana, and Delaware do not tax real property — the land and buildings you own. Wyoming also has no property tax on real estate. These five states fund schools, roads, and local services through other taxes instead: sales tax, income tax, business taxes, or a mix of those.
The catch is that "no property tax" does not mean "no housing costs." Hawaii and Delaware have high income taxes or sales taxes that offset the savings. Louisiana and Alabama have lower overall tax burdens but also lower average incomes and fewer public services in some areas. Wyoming has no income tax and no property tax, which makes it the most tax-friendly for property owners — but housing costs and other living expenses vary widely by town.
If you own a home in one of these states, you will not receive a property tax bill from the county or state. You still pay mortgage interest, homeowners insurance, and maintenance. You still owe federal income tax if you have income. But the annual tax bill tied to your home's value does not exist.
Key Takeaways
- Hawaii, Alabama, Louisiana, Delaware, and Wyoming do not charge property tax on real estate you own.
- These states replace property tax revenue with income tax, sales tax, business taxes, or other sources, so the total tax burden varies widely.
- Wyoming has no income tax and no property tax, making it the lowest-tax option for property owners, though housing costs depend on location.
- Moving to a no-property-tax state to save money only works if you compare the full tax picture, including state income tax and sales tax rates.
- Property tax savings in Hawaii and Delaware are often offset by higher income or sales taxes, so the benefit is smaller than it appears.
How these five states replaced property tax revenue
Hawaii relies heavily on state income tax and sales tax. The state income tax rate ranges from 1.4% to 11%, depending on your income bracket. Sales tax is 4.17% statewide, plus county surcharges that can push it to 4.71%. For a homeowner earning $60,000 a year, the income tax alone is roughly $4,000 to $5,000 annually — more than many property tax bills in other states.
Alabama and Louisiana use sales tax as their primary replacement. Alabama's state sales tax is 4%, plus local sales taxes that range from 7% to 11% total depending on the county. Louisiana's state sales tax is 4.45%, with local rates pushing the total to 5.53% to 10.45%. Both states also tax groceries and other necessities, which increases the burden on lower-income households.
Delaware has no sales tax but charges a 5.75% state income tax and a 6.6% tax on corporate income. For renters and property owners without high incomes, Delaware's tax burden is low. For business owners and high earners, the income tax is steeper than property tax would be elsewhere.
Wyoming has no income tax, no sales tax, and no property tax. Instead, the state taxes mineral extraction, oil and gas production, and business licenses. This works because Wyoming has significant natural resource revenue. For residents, the result is the lowest overall tax burden of the five states — but housing costs in desirable areas like Jackson Hole are very high, which can erase the tax savings.
Whether moving to a no-property-tax state saves money
The answer depends on your income and where you move within the state. A retiree living on $40,000 a year in Social Security will save money moving from a high-property-tax state (like New Jersey or Illinois) to Alabama or Louisiana, because Social Security is not taxed in those states and the sales tax on essentials is the main cost. A working professional earning $100,000 a year will likely pay more in Hawaii or Delaware income tax than they would have paid in property tax in many other states.
Wyoming is the exception: there is no income tax, no sales tax, and no property tax. A person with any income level pays less state tax in Wyoming than in most other states. However, Wyoming has fewer job opportunities outside of tourism, energy, and agriculture, so the move only makes financial sense if you can work remotely or are retired.
Property values themselves are also lower in Alabama and Louisiana than in comparable homes in high-property-tax states, which means the property tax you would have paid was never as high as it appears. A $200,000 home in rural Louisiana might have cost $400,000 in suburban New Jersey, and the property tax difference reflects that gap in home value, not just tax policy.
States with very low property tax as an alternative
If you want to avoid high property taxes but do not want to move to one of the five no-tax states, several states charge property tax at rates below 0.5% of home value annually. South Carolina, West Virginia, and Mississippi all have effective property tax rates below 0.6%. Oklahoma, Arkansas, and Kentucky are also in the bottom tier.
These states still charge property tax, so you will receive a bill. But the bill is much smaller than in states like New Jersey (2.49% average), Illinois (2.27%), or Connecticut (2.14%). A $300,000 home in South Carolina costs roughly $900 to $1,200 per year in property tax, compared to $6,000 to $7,500 in New Jersey.
The trade-off is that low-property-tax states often have lower school funding and fewer public services. Before moving, research the specific county or school district, because variation within a state can be large.
What happens to renters in no-property-tax states
Renters do not pay property tax directly, but they pay it indirectly through rent. Landlords factor property tax into the rent they charge. In states with no property tax, landlords have lower costs, which can mean lower rents — but competition, demand, and local wages matter more than tax policy. Hawaii has no property tax but very high rents because housing is scarce and demand is high. Wyoming has no property tax and lower rents in most towns, but Jackson Hole and other tourist areas have rents as high as Hawaii.
For renters, the real benefit of living in a no-property-tax state is the sales tax or income tax structure. If you rent in Louisiana and buy most of your goods out of state or online, you avoid much of the sales tax. If you rent in Wyoming and have no income, you pay almost no state tax at all.
How to research property tax in your current state
To compare your current property tax to what you would pay elsewhere, find your effective property tax rate — the percentage of your home's value you pay in tax each year. Your county assessor's office publishes this rate, or you can divide your annual property tax bill by your home's assessed value. If you pay $4,000 a year on a home assessed at $300,000, your effective rate is 1.33%.
Then multiply that rate by the home value you are considering in the new state. If you are looking at a $250,000 home in Alabama, you would pay $0 in property tax. If you are looking at a $250,000 home in South Carolina, you would pay roughly $1,250 to $1,500 per year. Compare that to what you pay now, then add the income tax and sales tax burden in the new state to see the full picture.
State tax websites and the Tax Foundation publish comparison tables, but they change yearly. Call the county assessor's office in the county where you are considering moving — they can tell you the exact property tax rate and any exemptions that might explore to you.
Frequently Asked Questions
Do I still have to pay property tax if I own a home in Hawaii or Wyoming?
No. Hawaii and Wyoming do not tax real property at all. You will not receive a property tax bill from the state or county. You still pay mortgage interest, homeowners insurance, and maintenance costs, but not property tax.
Can I move to Wyoming to avoid all state taxes?
Wyoming has no income tax, no sales tax, and no property tax, so your state tax burden is very low. However, you must be able to live there — Wyoming has fewer job opportunities than larger states, and housing in desirable areas is expensive. If you are retired or work remotely, Wyoming is a viable option.
Is the property tax savings in Hawaii worth moving there?
Probably not, unless you have other reasons to move. Hawaii's state income tax is 1.4% to 11%, and sales tax is 4.17% to 4.71%. For most working people, the income tax alone exceeds what they would pay in property tax in other states. Housing is also very expensive in Hawaii.
What is the lowest property tax state if I want to stay in the South?
Louisiana and Alabama have no property tax. If you want to pay property tax but keep it low, South Carolina, Mississippi, and Arkansas all have effective rates below 0.6% of home value. Research the specific county, because rates vary.
Do renters benefit from living in a no-property-tax state?
Renters do not pay property tax directly, but landlords pass the cost to tenants through rent. In no-property-tax states, rents may be slightly lower, but demand and local wages matter more. The real benefit for renters is the sales tax or income tax structure — for example, avoiding high sales tax in Louisiana by shopping online.