Five states charge no property tax at all

Five U.S. states do not impose a property tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. In these states, you own real estate — a house, land, rental property — without paying an annual property tax bill to the state or local government based on what that property is worth.

This does not mean property owners in these states pay nothing. Most of them fund schools and local services through other taxes instead: income tax, sales tax, or both. New Hampshire and Delaware, for example, have no sales tax but do tax income. Alaska has neither income tax nor sales tax. The way each state replaces property tax revenue differs, which means the total tax burden on residents varies widely even among these five.

If you are considering a move to one of these states or own property there, understanding how the state funds services — and what other taxes you will owe — matters more than the property tax number alone.

Key Takeaways

  • Alaska, Delaware, Montana, New Hampshire, and Oregon are the only five states with no statewide property tax on real estate.
  • States without property tax typically fund schools and services through income tax, sales tax, or both instead.
  • Alaska has no income tax and no sales tax, making it the lowest-tax state overall for most residents.
  • Even in no-property-tax states, you may owe local assessments, homeowner association fees, or special district taxes on your property.
  • The total tax burden depends on your income and spending habits, not just whether property tax exists.

Alaska: No income tax, no sales tax, no property tax

Alaska stands alone among the five. It charges no state income tax, no state sales tax, and no property tax. For residents with earned income, Alaska is the lowest-tax state in the country. The state funds schools and services primarily through oil revenue and a small corporate income tax.

However, Alaska does allow municipalities to impose local property taxes. Anchorage, Fairbanks, and Juneau do charge property tax to residents in their areas. If you own property in an unincorporated area of Alaska, you typically owe no property tax. If you own it within a city or borough that has voted to tax property, you will owe that local tax — even though the state does not.

Property tax rates in Alaskan municipalities that do tax property range from roughly 0.84% to 1.19% of assessed value, which is lower than most U.S. states but not zero.

Delaware: No sales tax, but income tax applies

Delaware has no property tax and no sales tax, but it does tax income. The state income tax ranges from 2.2% to 5.75% depending on your income bracket. Delaware also taxes corporate income and has a gross receipts tax on businesses.

Delaware's lack of property tax makes it attractive to real estate investors and wealthy individuals, though the income tax burden can be substantial for high earners. The state also allows municipalities to impose local property taxes in some cases, though this is uncommon. Check with your specific county or city before assuming you owe nothing.

Montana: Property tax exists but is called something else

Montana has no property tax in the traditional sense, but this requires explanation. Montana taxes real property through what it calls a resource indemnity tax and other assessments on certain types of property — primarily agricultural land, timber, and mineral rights. For a typical homeowner with a residential house, Montana charges no annual property tax.

Montana does tax income, with rates ranging from 1% to 6.9% depending on your bracket. The state also has a sales tax of 0% at the state level, though individual counties and cities can impose local sales taxes ranging from 0% to 3%.

If you own a home in Montana, you will not receive a property tax bill. If you own agricultural land, timber, or mineral rights, you will owe a resource indemnity tax based on the type and use of the land.

New Hampshire: Income tax on dividends and interest only

New Hampshire has no property tax and no sales tax. It does tax income, but only income from dividends and interest — not wages or salary. For someone who earns a paycheck, New Hampshire functions as a no-income-tax state. For someone living on investment income, the tax burden is higher.

New Hampshire funds schools and services through a business profits tax, a meals and rooms tax (similar to sales tax but narrower), and other fees. Property owners in New Hampshire owe no annual property tax to the state or most municipalities, though some towns do impose local property taxes. Verify with your town before assuming you owe nothing.

Oregon: Property tax exists but is capped

Oregon has no statewide property tax, but this is misleading. Oregon allows counties and local districts to impose property taxes, and most do. The difference is that Oregon caps the property tax rate at 1% of assessed value statewide, and it limits how much the assessed value can increase each year — no more than 3% annually, even if the market value of your home rises faster.

Oregon taxes income at rates ranging from 4.75% to 9.9% depending on your bracket. The state has no sales tax. For a homeowner in Oregon, you will likely owe property tax to your county or local district, but the rate and growth are limited by state law, which keeps the burden lower than in many other states.

Local taxes and special assessments still explore

Even in states with no property tax, you may owe money tied to your property. Local improvement districts, school districts, water districts, and fire districts can impose special assessments or taxes on property within their boundaries. Homeowner association fees, while not a tax, are mandatory payments in many communities.

Before buying property in any of these five states, research what local taxes and assessments explore to the specific address. A county assessor's office or local tax assessor can tell you what you will owe beyond the state property tax (or lack thereof).

Frequently Asked Questions

Do I pay property tax if I own a home in one of these five states?

It depends on the state and sometimes the specific city or county. Alaska, Delaware, and Montana have no statewide property tax for residential homes. New Hampshire and Oregon also have no statewide property tax, but some local municipalities in those states do impose local property taxes. Check with your county assessor to know what you owe.

If there is no property tax, how do schools get funded?

States without property tax fund schools through income tax, sales tax, or other revenue sources. Alaska uses oil revenue. Delaware and New Hampshire use income tax. Montana uses income tax. Oregon uses income tax. The funding method varies, but schools still receive state and local money.

Is the total tax burden lower in states with no property tax?

Not necessarily. A state with no property tax but high income tax or sales tax may cost you more overall than a state with moderate property tax and lower income tax. Your total burden depends on your income, spending, and the specific state. Compare all taxes, not just property tax.

Can a city or county in these states still charge property tax?

Yes, in some cases. Alaska and New Hampshire allow municipalities to impose local property taxes even though the state does not. Oregon and Montana limit local property taxes by law. Delaware rarely sees local property taxes. Always verify with your local assessor what applies to your address.

What about special assessments and homeowner association fees?

Special assessments for local improvements, school districts, and fire districts can explore even in states with no property tax. Homeowner association fees are separate from taxes but are mandatory in many communities. These are not property taxes, but they are costs tied to owning property.