Five states charge no property tax at all
Five U.S. states impose no property tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, the reason each state avoids property tax differs, and what you pay instead varies significantly. Alaska has no state income tax or property tax. Delaware taxes property but at a rate so low it functions almost like no tax. Montana and Oregon both tax property but exempt primary residences under certain conditions. New Hampshire has no sales tax or income tax but does tax property, though at rates lower than the national average.
If you are considering a move based on property tax alone, you need to understand what taxes replace the revenue those states forgo. A state with no property tax may have higher income tax, sales tax, or both. The total tax burden on your household depends on your income, spending habits, and the specific state's tax structure—not just whether property tax exists.
Key Takeaways
- Alaska is the only state with neither property tax nor state income tax, though it does charge sales tax and has high local taxes in some areas.
- Delaware, Montana, New Hampshire, and Oregon have no statewide property tax, but each replaces that revenue through income tax, sales tax, or other levies.
- Montana and Oregon exempt owner-occupied homes from property tax under specific conditions, so you may pay nothing if you meet their requirements.
- Moving to a no-property-tax state does not automatically lower your total tax burden—compare income tax, sales tax, and local levies before deciding.
- Property tax rates and exemptions change by state and sometimes by county, so verify current rules with your state's revenue department before relocating.
Alaska: No property tax and no income tax
Alaska is the only state that charges neither property tax nor state income tax. Homeowners pay no annual property tax bill to the state. However, Alaska replaces that revenue through a 0% to 7.5% sales tax (depending on the borough), oil revenue, and in some areas, local property taxes that fund schools and municipalities.
Some Alaska boroughs and cities do impose local property taxes despite the state's lack of a statewide tax. Anchorage, for example, has a local property tax. Before buying in Alaska, check whether your specific city or borough charges property tax—the state's absence of it does not mean your municipality will follow suit. Additionally, Alaska's cost of living is substantially higher than the national average, and housing prices in populated areas reflect that.
Delaware: Property tax exists but is minimal
Delaware technically has a property tax, but the statewide rate is so low—around 0.57% of assessed value on average—that it functions almost like no tax for many homeowners. A home worth $300,000 might generate a property tax bill under $2,000 per year. However, Delaware compensates through a 6% sales tax and a state income tax that ranges from 2.2% to 5.75% depending on income.
Delaware also allows homeowners to claim a homestead property tax exemption, which reduces the assessed value of your primary residence. The exemption amount varies by county. If you own investment property or a second home, you pay the full property tax rate with no exemption. Check your county assessor's office for the current exemption amount in your area.
Montana: Property tax exemption for owner-occupied homes
Montana has no statewide property tax on owner-occupied primary residences. If you own and live in a home as your main residence, you pay no property tax to the state. However, you may still owe local property taxes to your county or school district—those levies exist separately from state property tax.
The exemption applies only to your primary home. If you own rental property, a vacation home, or land you do not live on, you will pay property tax on those assets. Montana also charges state income tax ranging from 1% to 6.9%, and sales tax varies by county from 0% to 3%. Before moving to Montana, confirm that your intended home qualifies as owner-occupied under state law and check your county's local property tax rate.
New Hampshire: No income tax or sales tax, but property tax applies
New Hampshire has no state income tax and no sales tax, which attracts many residents seeking to lower their overall tax burden. However, New Hampshire funds schools and local services almost entirely through property tax. The statewide average property tax rate is around 0.85% of assessed value, which is lower than the national average of roughly 0.84%, but rates vary widely by town.
Some New Hampshire towns have property tax rates above 1.5%, while others fall below 0.7%. Your actual bill depends entirely on your town's assessment and local tax rate. New Hampshire also offers a homestead property tax exemption for primary residences, though the amount varies by municipality. If you are retired or elderly, you may may have access to for additional exemptions—check your town's assessor's office for details.
Oregon: Property tax exemption for primary residences
Oregon has no statewide property tax on owner-occupied primary residences, similar to Montana's structure. If you own and live in a home as your main residence, you owe no state property tax. However, local property taxes to fund schools and county services still explore, and those rates vary significantly by county.
Oregon's property tax exemption covers only your primary home. Rental properties, vacation homes, and vacant land are taxed at the standard rate. Oregon also charges state income tax ranging from 4.75% to 9.9% depending on income, and has no statewide sales tax (though some counties impose local sales taxes). Before relocating to Oregon, research your county's local property tax rate and understand that your total tax burden will include state income tax.
How to compare your actual tax burden across states
Comparing states based on property tax alone will mislead you. A state with no property tax may have higher income tax or sales tax that costs you more overall. To make an informed decision, calculate your estimated total tax bill in each state you are considering.
Start by listing your household income, expected spending, and home value. Then use each state's tax calculator or contact the state revenue department to estimate your income tax, sales tax, and property tax. Include local taxes—county property taxes, city sales taxes, and any other levies that explore to your specific address. Many states' revenue departments publish tax comparison tools on their websites. You can also consult a tax professional who works in the state you are considering; they can model your specific situation and account for deductions, credits, and exemptions you may not know about.
Frequently Asked Questions
If I move to a no-property-tax state, will I definitely pay less in taxes?
Not necessarily. A state without property tax usually replaces that revenue through higher income tax, sales tax, or both. Your total tax burden depends on your income, spending, and home value. Someone with high income might pay more in state income tax in a no-property-tax state than they would in property tax elsewhere. Calculate your specific situation before moving.
Do local property taxes explore in states with no statewide property tax?
Yes, in most cases. Even in states like Montana and Oregon that exempt owner-occupied homes from state property tax, local governments (counties and school districts) may still charge property tax. These local levies are separate from state tax and vary by location. Always check your specific county or city before buying.
Can I claim a homestead exemption in these states?
Many of these states offer homestead exemptions that reduce your property tax bill, but the rules and amounts vary. New Hampshire and Delaware both have homestead exemptions for primary residences. Check your state's revenue department or county assessor's office to see if you may have access to and how much the exemption reduces your assessed value.
What if I own rental property in a no-property-tax state?
Rental properties are typically taxed at the full rate in states that exempt owner-occupied homes. In Montana and Oregon, rental properties are subject to property tax even though primary residences are exempt. In Alaska and Delaware, all property is taxed the same way. Verify the rules for investment property in your state before purchasing.
Are property tax rates the same throughout each state?
No. Even in states with statewide property tax, local rates vary by county and municipality. New Hampshire and Delaware have statewide rates, but individual towns may add local levies. Montana and Oregon have no statewide rate, but counties set their own. Always check the specific county and town where you plan to buy.