The states with the lowest property tax rates
Hawaii has the lowest effective property tax rate in the country at roughly 0.28% of home value, followed by Alabama (0.41%), Louisiana (0.55%), and West Virginia (0.58%). These rates mean a homeowner with a $200,000 house pays between $560 and $1,160 per year in property tax. The lowest-tax states tend to rely more heavily on sales tax or income tax to fund schools and local services, so a low property tax rate does not mean low overall taxes.
The difference between the lowest and highest states is dramatic. New Jersey, the highest at 2.49%, charges roughly nine times more property tax than Hawaii on the same $200,000 home. Even mid-range states like Texas (1.80%) or Florida (0.83%) show wide variation. Your actual bill depends not just on state rate but on your county, your home's assessed value, and local exemptions—so two houses in the same state can have very different taxes.
Key Takeaways
- Hawaii, Alabama, Louisiana, and West Virginia have the four lowest state property tax rates, all under 0.6% of home value.
- Property tax rates vary significantly within states, so your county and local assessment matter as much as the state average.
- States with low property taxes often have higher sales taxes or income taxes to fund schools and services.
- The effective tax rate—what you actually pay—depends on your home's assessed value and any exemptions you may receive.
How property tax rates are calculated and compared
The effective property tax rate is the total property tax paid divided by the total value of all taxable property in the state. This is the number used to rank states. A state's rate is not the same as your individual tax bill—your bill depends on your home's assessed value, which can be much lower than market value, and on local tax rates set by counties and school districts.
States publish their effective rates based on recent sales data and tax collections. The Tax Foundation and the Lincoln Institute of Land Policy track these figures annually, though the most recent complete data is usually one to two years old. Rates shift slowly because they reflect long-term funding decisions, not year-to-year changes in home prices.
Why low-tax states use other revenue sources
States with low property taxes fund schools and local government through sales tax, income tax, or both. Hawaii has no state sales tax but charges 4.0% to 4.5% depending on county, plus a 4% state income tax. Louisiana has a 4.45% state sales tax and a state income tax that ranges from 2% to 6%. Alabama charges 4% sales tax and a state income tax from 2% to 5%.
This matters because a state's low property tax does not mean you pay less overall—it means the tax burden is distributed differently. A family that owns a home but spends little may save money in a low-property-tax state. A family that rents and spends heavily on goods may pay more in sales tax. Someone with high income pays more in income tax. Compare the full tax picture, not just property tax, before deciding where to move.
States with moderate property tax rates
Florida (0.83%), Texas (1.80%), and Colorado (0.51%) fall in the middle range. Florida and Texas have no state income tax, which attracts retirees and high earners. Colorado has a 4.63% state income tax but lower property taxes than many northern states. South Carolina (0.57%) and Georgia (0.92%) also rank below the national average of 1.08%.
These states often appeal to people relocating from high-tax areas because the property tax alone is lower, even if other taxes are higher. However, property tax is usually the largest single tax bill for homeowners, so the savings can be real. Check your state's current rate and your county's assessment practices before assuming a move will lower your total tax burden.
How to find your county's specific property tax rate
Your county assessor's office publishes the tax rate for your property. You can find it by searching "[your county] assessor" online or calling the county courthouse. The assessor's website usually shows the tax rate as a percentage or as a dollar amount per $1,000 of assessed value—for example, $15 per $1,000 means a 1.5% rate on assessed value.
Your property tax bill is calculated as: assessed value × tax rate. If your home is assessed at $150,000 and the rate is $15 per $1,000, your bill is $2,250 per year. Assessed values are often lower than market value because they are updated on a schedule—sometimes every year, sometimes every three to five years. Some states cap how much the assessed value can increase each year, which keeps taxes stable but can mean your assessment lags behind your home's actual worth.
Exemptions and deductions that lower your bill
Most states offer exemptions that reduce the assessed value of your home. Homestead exemptions are the most common—they reduce assessed value by a fixed amount or percentage if the home is your primary residence. The amount varies widely: Florida allows up to $50,000 off assessed value, while other states offer smaller reductions. Some states exempt seniors, veterans, or people with disabilities from part or all of their property tax.
You usually must file for an exemption with your county assessor—it does not happen automatically. Check your county's website or call the assessor's office to learn which exemptions you may receive and the important date to file. Missing the important date can cost you a year of savings, so explore early in the year if possible.
Frequently Asked Questions
Do property taxes increase every year?
Property taxes increase when your assessed value increases or when the tax rate increases. Assessed values usually rise slowly unless you make major improvements to your home. Tax rates can increase if local governments raise them to fund schools or services, but this varies by county and year. Some states cap annual increases in assessed value, which slows tax growth.
Can I move to a low-tax state and save money?
Maybe. Compare property tax, sales tax, and income tax in both states. A low-property-tax state may have higher sales or income tax. If you own a home and earn high income, a state with no income tax but moderate property tax may save you money overall. If you rent and spend heavily, a state with low sales tax may be better.
What is the difference between assessed value and market value?
Market value is what your home would sell for today. Assessed value is what the county uses to calculate taxes, and it is often lower. Assessed values are updated on a schedule—sometimes yearly, sometimes every few years—so they lag behind market changes. In fast-growing areas, assessed value may be much lower than market value.
Do all homeowners in the same state pay the same property tax rate?
No. Tax rates vary by county and sometimes by school district within a county. Two homes with the same market value in different counties of the same state can have very different tax bills. Check your specific county's rate, not just the state average.
What happens if I disagree with my home's assessed value?
You can file an appeal with your county assessor, usually within a set window after the assessment is mailed. Bring evidence of comparable home sales or a recent appraisal showing lower value. The process and important date vary by state, so contact your assessor's office for instructions.