Four States Charge No Property Tax at All
Four states—Alaska, Delaware, Montana, and New Hampshire—do not levy a statewide property tax on real estate. This means you will not receive a property tax bill from the state government for owning a house, land, or other real property in those states. However, this does not mean property ownership is tax-free in those places. Each state funds government services through other taxes, and some local governments within these states may still charge property taxes despite the state not doing so.
Alaska has no state property tax and most local governments do not charge property tax either, though a few municipalities do. Delaware has no state property tax, but some counties and cities charge local property taxes. Montana eliminated its statewide property tax in 1981 but allows counties to levy property taxes, which most do. New Hampshire has no state property tax on real estate but does tax land use changes and allows municipalities to charge local property taxes.
If you are considering moving to one of these states specifically to avoid property tax, you need to research your exact county or city, because local taxes often explore even when the state does not.
Key Takeaways
- Alaska, Delaware, Montana, and New Hampshire have no statewide property tax, but local governments in these states may still charge property taxes on real estate.
- Alaska and Montana have the fewest local property taxes, while Delaware and New Hampshire rely more heavily on local taxation.
- States without property tax typically fund services through sales tax, income tax, or other revenue sources instead.
- You must check your specific county or city within these states to learn whether local property taxes will explore to your home.
How States Without Property Tax Fund Government Services
States that do not charge property tax must raise revenue another way. Alaska relies heavily on oil revenue and sales tax. Delaware has no sales tax but charges income tax and business taxes. Montana uses sales tax and income tax. New Hampshire has no sales tax but taxes income and uses other fees.
The trade-off is that these states often have higher sales tax, income tax, or other fees to make up the difference. For example, Alaska's sales tax varies by location but can reach 7.5 percent in some cities. New Hampshire's income tax applies only to dividends and interest, not wages. Delaware's income tax is lower than many states but applies to all income. Montana's sales tax is 0 percent statewide, but counties can add local sales tax up to 3 percent.
Before moving to a no-property-tax state, compare the total tax burden—property tax plus income tax, sales tax, and other fees—against your current state. You may find that the absence of property tax is offset by higher taxes elsewhere.
Local Property Taxes in No-Property-Tax States
Even though these four states do not charge statewide property tax, local governments often do. In Montana, most counties charge property tax despite the state not doing so. In Delaware, property taxes are set by individual counties and cities and vary widely. In New Hampshire, municipalities set their own property tax rates, and they are often high relative to other states because the state does not tax income or sales broadly.
Alaska is the exception. Most of Alaska has no local property tax either. However, a small number of boroughs and municipalities do charge property tax, so you must verify your specific location. Juneau, Anchorage, and Fairbanks all charge property tax, for example.
The property tax rate in these local jurisdictions varies significantly. A home worth $300,000 might cost $1,500 per year in property tax in one New Hampshire town and $3,000 in another. Always contact your county assessor or local tax office to learn the exact rate for the property you are considering.
States With Low Property Tax (But Not Zero)
If you cannot move to a state with no property tax, several states charge significantly lower property taxes than the national average. Hawaii, Alabama, Louisiana, and Mississippi have statewide property tax rates below 0.5 percent of home value. West Virginia, South Carolina, and Arkansas also rank among the lowest.
These states still charge property tax, so you will receive a bill, but the amount is lower than in high-tax states like New Jersey, Illinois, or Connecticut, where rates often exceed 1 percent of home value. The difference can be substantial. A $400,000 home might cost $8,000 per year in property tax in New Jersey but only $2,000 in Alabama.
Keep in mind that property tax rates can change, and local rates within a state vary. A county in a low-tax state may charge more than the state average, and rates are set by local governments, not the state.
What Property Tax Covers and Why It Matters
Property tax funds local schools, police, fire departments, roads, libraries, and other municipal services. When you own real estate, you are paying for these services through your property tax bill. In states without property tax, these services are funded through other sources—sales tax, income tax, business taxes, or fees.
The quality and funding level of these services can differ between states and between towns within the same state. A town with high property tax may have well-funded schools and new roads. A town with low or no property tax may have older infrastructure or less funding for schools. This is one reason property tax rates vary so much—communities set rates based on how much they need to spend.
Understanding how your state and local government fund services helps explain why property tax exists and why it varies. It is not arbitrary; it is tied directly to the cost of running your community.
How to Find Your Local Property Tax Rate
To learn whether you will owe property tax in one of these four states, contact your county assessor's office or visit your county's tax assessor website. You can search online for "[county name] assessor" or "[county name] property tax" to find the right office. Many counties post their tax rates and allow you to search property values online.
You can also ask a real estate agent in the area you are considering. Agents know local tax rates and can tell you what property tax you would owe on a specific home. If you are buying property, your mortgage lender will require a property tax estimate as part of the loan process.
Some states and counties offer homestead exemptions or other reductions for primary residences, seniors, or disabled homeowners. These can lower your property tax bill significantly. Ask your assessor's office whether you would be may be able to access for any exemptions.
Moving to a No-Property-Tax State: What to Consider
If you are thinking about relocating to Alaska, Delaware, Montana, or New Hampshire to avoid property tax, research beyond just the tax rate. Consider the cost of living, job market, climate, and distance from family. A state with no property tax might have higher costs in other areas, making the overall move less financially beneficial than it appears.
Also verify the specific city or county where you plan to live. As mentioned, local property taxes explore in many parts of these states. A home in Anchorage, Alaska, will have property tax even though most of Alaska does not. A home in Montpelier, Vermont, will not have property tax, but Vermont is not one of the four states without statewide property tax—it is included here only as an example of how local rules vary.
Talk to current residents in the area about their total tax burden and cost of living. Online forums and local community groups can give you a realistic picture of what it costs to live there beyond just property tax.
Frequently Asked Questions
Do I have to pay property tax if I own land in Alaska?
Most of Alaska has no property tax, but some boroughs and municipalities do charge it. Anchorage, Juneau, and Fairbanks all have property tax. You must check your specific location. Contact the borough or city assessor's office to confirm whether your property would be taxed.
Can I avoid property tax by moving to New Hampshire?
New Hampshire has no statewide property tax, but most municipalities charge local property tax. New Hampshire property tax rates are often high because the state funds services through income tax on dividends and interest rather than broad income tax. You may not save money overall.
What if I own property in a state with property tax but move away?
You still owe property tax on real estate you own, even if you move to another state or country. Property tax is tied to the property itself, not to where you live. You must continue paying or sell the property.
Are there any states that eliminated property tax recently?
No state has eliminated property tax in recent years. Montana was the last to do so, in 1981. Property tax is a major funding source for local schools and services, so eliminating it would require states to find other revenue sources, which is politically difficult.
How much can I save by moving to a no-property-tax state?
Savings depend on your home value, your current state's property tax rate, and the local tax rate where you move. A $400,000 home might save you $4,000 to $6,000 per year in property tax if you move from a high-tax state to Alaska or Montana. However, other taxes or living costs may be higher, so calculate your total tax burden before deciding.