No state has eliminated property tax entirely, but Hawaii comes closest
There is no U.S. state that has abolished property tax altogether. However, Hawaii has the lowest effective property tax rate in the nation at roughly 0.28% of home value, making it the closest to a no-property-tax state. Hawaii taxes real estate but at rates so low that homeowners pay far less than in other states. For comparison, the national average effective property tax rate is around 0.84%, and some states like New Jersey and Illinois exceed 2%.
If you are looking for states with minimal property tax burden, Hawaii, Alabama, Louisiana, and Colorado all rank in the bottom five nationally. The reason these states keep rates low varies: Hawaii has limited land and high property values that generate revenue even at low rates; Alabama and Louisiana have historically low tax rates across the board; Colorado caps assessment increases. Understanding where your state falls on this spectrum matters if you are considering a move or trying to estimate your long-term housing costs.
Key Takeaways
- Hawaii has the lowest property tax rate in the United States at approximately 0.28% of assessed home value, though it does still impose property tax.
- Alabama, Louisiana, Colorado, and Mississippi also rank among the lowest-taxing states, each with effective rates below 0.60%.
- Property tax rates vary significantly by county and municipality within each state, so your actual bill depends on local assessments, not just state law.
- Some states offer homestead exemptions or senior exemptions that reduce the taxable value of your home, lowering your annual bill even if the state rate is moderate.
The five states with the lowest property tax rates
Hawaii leads the nation with an effective property tax rate of 0.28%, followed by Alabama at 0.41%, Louisiana at 0.55%, Colorado at 0.51%, and Mississippi at 0.79%. These five states consistently rank at the bottom of national property tax comparisons. However, "lowest rate" does not mean you pay nothing—it means the percentage of your home's value you owe each year is smaller than elsewhere.
The reason these states maintain low rates differs. Hawaii's low rate reflects high property values; even a small percentage generates substantial revenue. Alabama and Louisiana have historically kept tax rates low across all property types. Colorado limits how much the assessed value of your home can increase year to year, which caps tax growth. Mississippi's rate is low but still higher than the other four, and local variation matters significantly there.
Keep in mind that a low state rate does not may provide a low bill. A home worth $300,000 in Hawaii at 0.28% costs roughly $840 per year, while the same home in a moderate-tax state at 1% costs $3,000. But if that same home in Hawaii is assessed at $600,000, the bill jumps to $1,680. Assessment practices and local add-ons vary widely.
How property tax rates vary by county and city
State property tax rates are only part of the picture. Most property tax is collected and set at the county or municipal level, which means two homes in the same state can have vastly different tax bills. A home in one county might pay 0.5% while a home 20 miles away in another county pays 1.2%, even though both are in the same state.
Local governments set rates based on their own budget needs. A county with expensive schools, new infrastructure, or aging roads may levy higher property taxes to fund those services. A county with lower service demands or other revenue sources may keep rates down. This is why comparing states alone is incomplete—you need to know the specific county or city where you plan to live or own property.
When researching property tax in a low-tax state like Hawaii or Alabama, search for the specific county assessor's office or tax collector's website. They publish current rates and can tell you what your bill would be on a home of a given value. This local information is far more useful than the state average.
Homestead exemptions and other tax breaks
Many states reduce property tax through homestead exemptions, which lower the taxable value of your primary residence. Some states exempt a flat dollar amount—say, $50,000 of your home's value—from taxation. Others exempt a percentage. A few states offer exemptions only to seniors, veterans, or people with disabilities.
For example, Florida exempts $50,000 of assessed value for homeowners who live in their home as their primary residence. If your home is assessed at $300,000, you pay tax on $250,000 instead. Texas offers a homestead exemption that varies by school district but typically exempts 20% of home value from school taxes. Louisiana offers exemptions to seniors and disabled homeowners that can reduce bills significantly.
These exemptions are not automatic in most states—you must file a form with your county assessor or tax collector to claim them. The important date is usually early in the tax year. Missing the important date can cost you hundreds of dollars in unnecessary taxes. Check your county assessor's website for the exemption form and important date in your area.
States with no income tax versus states with no property tax
It is common to confuse states with no income tax with states that have no property tax. They are different. Nine states have no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only dividends and interest). However, most of these states still collect property tax, sometimes at rates higher than the national average.
Texas, for instance, has no state income tax but property tax rates that average around 1.8%—well above the national average. Florida has no income tax but collects property tax at roughly 0.91%. The trade-off is intentional: states that do not tax income often rely more heavily on property tax and sales tax to fund schools and services. Conversely, Hawaii has income tax but very low property tax.
If you are moving to reduce your overall tax burden, look at the combination of income tax, property tax, and sales tax in your target state, not just one category. A state with no income tax might cost you more in property tax than your current home.
What happens if you own property in a high-tax state
If you own a home in a state with higher property tax rates—such as New Jersey, Illinois, Connecticut, or New Hampshire—your annual bill will be substantially higher than in Hawaii or Alabama, even on an identical home. A $400,000 home in New Jersey at an effective rate of 2.49% costs about $9,960 per year. The same home in Hawaii costs roughly $1,120.
You cannot change your state's tax rate, but you can explore exemptions available to you. Check whether your state offers a homestead exemption, senior exemption, veteran exemption, or exemption for people with disabilities. Some states allow you to defer property tax payments if you are over a certain age or meet income limits. Your county assessor's office can tell you what you may have access to for.
If you are considering a move, use online property tax calculators to compare the total cost of ownership in different states. Factor in income tax, sales tax, and property tax together. A state that looks cheap on one measure might be expensive overall.
How to find your state and county property tax rate
To find your specific property tax rate, start with your county assessor's or tax collector's website. Search "[your county name] assessor" or "[your county name] tax collector." Most counties publish current tax rates, assessment information, and exemption forms online. You can also call the office directly—assessors are accustomed to answering questions about rates and bills.
If you are shopping for a home in a new area, contact the assessor's office before you buy. Tell them the address and ask what the property tax would be on a home of that value. They can give you a rough estimate in minutes. This information should factor into your decision about whether a home is affordable for you.
For a national comparison, the Lincoln Institute of Land Policy and the Tax Foundation both publish annual property tax rate rankings by state. These are free resources that show where your state ranks and what the effective rates are in neighboring states.
Frequently Asked Questions
Can I avoid property tax by moving to Hawaii?
Hawaii has the lowest property tax rate in the nation, but you still owe property tax there. You cannot avoid it entirely by moving to any U.S. state. However, Hawaii's rate of 0.28% is so low that your annual bill will be far smaller than in most other states, even on a high-value home.
Do any countries have no property tax?
Some countries have eliminated or nearly eliminated property tax, including the Cayman Islands, Monaco, and certain regions of Switzerland. However, this article covers U.S. states only. If you are considering moving internationally, research that country's tax system separately.
What is the difference between assessed value and market value?
Assessed value is what your county assessor determines your home is worth for tax purposes. Market value is what a buyer would pay for it today. Assessed value is usually lower than market value, but not always. Your property tax bill is calculated on assessed value, not market value, which is why two identical homes can have different tax bills if they were assessed at different times or values.
If I rent instead of own, do I pay property tax?
You do not pay property tax directly as a renter. Your landlord pays it and typically passes the cost along through your rent. So renters do bear the cost of property tax indirectly, but they do not write a check to the assessor themselves.
Can I appeal my property tax assessment?
Yes. Most counties allow you to challenge your assessed value if you believe it is too high. The process and important date vary by county, but typically you file a formal appeal with the assessor's office or a county board of appeals. You may need to provide evidence such as recent appraisals or comparable home sales. Contact your county assessor for the specific process and important date in your area.