No state has zero property tax on all real estate, but four states charge no tax on primary residences
Hawaii, Alabama, Louisiana, and Mississippi do not tax the primary residence you live in. However, each state taxes other types of property — commercial buildings, rental properties, vacant land — differently. Hawaii and Louisiana also tax personal property like vehicles and business equipment. If you own investment property or a second home, you will still owe tax in these states.
No U.S. state has eliminated property tax entirely. Even states with the lowest rates still collect it. The four states listed above are the only ones that exempt your main home from property tax, which is what most homeowners mean when they ask this question.
Key Takeaways
- Hawaii, Alabama, Louisiana, and Mississippi do not tax the primary residence where you live, but they tax other real estate and sometimes personal property.
- Hawaii and Louisiana tax vehicles, boats, and business equipment even though they exempt your home.
- If you own rental property, a vacation home, or commercial real estate in these states, you will owe property tax on those holdings.
- The exemption applies only to your primary residence — the place where you legally live most of the year.
Hawaii: No tax on your home, but vehicles and business property are taxed
Hawaii does not tax real property that is your primary residence. You can own a house or condo and pay no annual property tax on it. However, Hawaii taxes personal property — vehicles, boats, aircraft, and business equipment — at rates that vary by county. The state also taxes rental properties and commercial real estate.
Hawaii's cost of living is high, and property values are among the highest in the nation. The lack of property tax on your home is offset by higher income tax rates and general expenses. If you move to Hawaii to avoid property tax, factor in the overall tax burden and cost of housing before deciding.
Alabama: Primary residence exempt, but rental and commercial property taxed
Alabama exempts your primary residence from property tax under its homestead exemption. You must own the property and live there as your main home. The exemption covers the full value of the house and land.
Rental properties, second homes, vacant land, and commercial buildings are all taxed in Alabama. The state also taxes vehicles and personal property. If you buy a house in Alabama to live in, you will owe no property tax on it. If you buy a second property to rent out, you will owe tax on that property.
Louisiana: Home exempt, but personal property and rentals are taxed
Louisiana exempts your primary residence from property tax if you meet the homestead exemption requirements. You must own the property, live there as your primary home, and be a Louisiana resident. The exemption is automatic in most parishes — you do not need to file a separate form.
Louisiana taxes vehicles, boats, and other personal property. Rental properties and commercial real estate are taxed. The state also has an income tax and sales tax, so the overall tax picture is not as straightforward as "no property tax on your home."
Mississippi: Primary residence exempt under homestead exemption
Mississippi exempts your primary residence from property tax through its homestead exemption. The exemption applies to the home and up to one acre of land surrounding it. You must own the property and live there as your main residence.
Investment properties, rental homes, and commercial real estate are taxed in Mississippi. The state also taxes vehicles and personal property. Mississippi has a lower overall cost of living than Hawaii or Louisiana, but income tax and sales tax rates vary by county and municipality.
How the homestead exemption works in these states
A homestead exemption is a legal protection that removes your primary residence from the property tax roll. You typically claim it by filing a form with your county assessor or tax office. The exemption usually requires that you own the property, live there as your main home, and meet residency requirements — often one year or more.
Once approved, the exemption stays in place as long as you own the home and live there. If you sell the house or move away, the exemption ends. If you rent out the property, you lose the exemption because it is no longer your primary residence.
The four states handle the process process differently. Hawaii and Louisiana often grant the exemption automatically when you register your home. Alabama and Mississippi usually require you to file a form. Check your county assessor's website for the exact steps and important date in your area.
What property tax you will still owe in these states
Even in states with no tax on primary residences, you will owe property tax on other holdings. Rental properties are taxed at the standard rate in all four states. Commercial buildings, vacant land, and investment real estate are taxed. In Hawaii and Louisiana, vehicles and personal property are also taxed.
The tax rates on these properties vary by county and municipality. Hawaii's rates are generally higher than those in Alabama, Louisiana, or Mississippi. If you plan to own multiple properties or run a business in one of these states, research the tax rates on commercial and rental property before moving.
States with the lowest property tax rates if these four do not fit your situation
If you cannot move to one of the four states with no primary residence tax, several states have very low property tax rates. New Jersey, Illinois, Connecticut, and Texas have rates below 1 percent in some areas, though they vary widely by county. Wyoming, South Dakota, and Montana also have low rates in many counties.
Property tax rates change year to year and differ between counties within the same state. A county with a low rate one year may raise it the next. Before choosing a state or county based on property tax alone, check the current rates with the county assessor's office and ask about recent trends.
Frequently Asked Questions
Do I have to file anything to get the homestead exemption in these states?
Hawaii and Louisiana often grant the exemption automatically when you register your home with the county. Alabama and Mississippi usually require you to file a form with the county assessor. Check your county's website or call the assessor's office to find out what paperwork you need and when it is due.
What if I own a second home in one of these states?
The exemption covers only your primary residence — the place where you legally live most of the year. A second home, vacation property, or investment home is taxed at the standard rate. You can claim the exemption on only one property per household.
Do I lose the exemption if I rent out part of my home?
If you rent out the entire property, you lose the exemption because it is no longer your primary residence. If you rent out a room or a portion while living there yourself, the rules vary by state and county. Contact your county assessor to find out whether partial rental disqualifies you.
Are there other taxes I should know about in these states?
All four states have income tax and sales tax. Hawaii and Louisiana have higher income tax rates than Alabama or Mississippi. Sales tax rates also vary by county. The lack of property tax on your home does not mean the overall tax burden is low — compare all taxes before deciding to move.
Can I claim the exemption if I just moved to one of these states?
Most states require you to be a resident for a certain period — often one year — before you can claim the homestead exemption. Some states allow you to claim it in your first year if you own the home and live there. Check your county's rules on residency requirements and filing important date.