Property taxes can make or break your budget as a homebuyer. That’s especially true if you live in one of the higher property tax states in the U.S. New Jersey, for example, has the the highest property tax rate in the nation at 2.26%, while Hawaii has the lowest at 0.27%. There are 20 states with property tax rates above the national average of 0.99%. If you want to see which states have the lowest property taxes, here’s a breakdown of the 10 states with the lowest property taxes in the U.S.
If you are a homeowner, a financial advisor can help optimize your tax planning.
What Are Property Taxes?
Property taxes in the U.S. are collected by local governments and usually based on the value of the property. The rates can vary from county to county and state to state. Property taxes generally pay for community safety, schools, infrastructure and other public projects.
If you’re in the market to buy a home, you need to consider how much property taxes will cost as part of your overall budget. As with other types of taxes, this is an expense that can generally increase over time.
10 States With the Lowest Property Tax Rates in the U.S.
The average property tax for the 10 states with the lowest rate is less than half (0.47%) of the U.S. national median, which is 0.99%. Below, we take a closer look at the 10 states with the lowest property tax rates in the country. All of the data below comes from the Census Bureau’s 2021 1-year American Community Survey (ACS) Estimates.
Hawaii has the lowest property tax rate in the U.S. at 0.27%. The Aloha state has a home median value of $722,500. For a comparison with New Jersey, the state with the highest effective property tax rate in the nation at 2.26%, Hawaii’s $389,800 home median value is just over twice the home median value of the Garden State. Hawaiian homeowners pay $1,971 in median real estate taxes per year.
Alabama is generally one of the more affordable states in the country. At 0.39%, it has the second-lowest property tax rate nationwide and a home median value of $172,800, which is almost $109,000 lower than the national home median value ($281,400). Homeowners in this state pay $674 annually in median real estate taxes.
Nevada is tied with Colorado for the third-lowest property tax rate in the nation (0.48%). The $373,000 home median value in this state, however, is almost $92,000 higher than the nation’s home median value of $281,400. But homeowners in the Sagebrush state pay $1,807 in median real estate taxes annually, which is $988 less than the median real estate taxes paid in the U.S.
Colorado ties with Nevada for the third-lowest property tax rate at 0.48%. But its home median value is $466,200, which is roughly $93,000 higher than Nevada’s figure. This is the sixth-highest home median value, after Hawaii, the District of Columbia, California, Washington and Massachusetts. Homeowners in the Centennial State pay $2,259 annually in median real estate taxes.
At 0.49%, the Gem State has the fourth-lowest property tax rate in the country. Homeowners in Idaho pay $1,817 annually in median real estate taxes, which is almost $1,000 lower than the median real estate taxes paid nationwide. Home median value in this state, however, is $369,300, which is nearly $88,000 more than the national home median value of $281,400.
The Grand Canyon state has the fifth-lowest property tax rate in the U.S. at 0.51%. It also features the 16th-highest home median value at $336,000. Homeowners in Arizona pay $1,707 annually in median real estate taxes, which is more than $1,000 lower than the median real estate taxes paid nationwide.
Utah’s 0.52% property tax rate is tied with South Carolina for the sixth-lowest in the country. But while property taxes are lower here than the 0.99% national rate, the home median value is the eighth-highest in the U.S. ($421,700). Homeowners in the Beehive State pay $2,191 annually in median real estate taxes, which is roughly $600 less than what Americans pay nationwide.
8. South Carolina
The Palmetto State ties with Utah as the sixth-lowest property tax rate in the nation at 0.52%. Generally an affordable state, home median value in South Carolina is $213,500, which is almost $68,000 less than the U.S. home median value. Homeowners in this state pay $1,105 annually in median real estate taxes, which is $1,690 less than what Americans pay nationwide.
Standing at 0.53%, Delaware has the seventh-lowest property tax rate in the country. The state’s home median value is $300,500, which is slightly above the national home median value of $281,400. Homeowners in The First State pay $1,602 annually in median real estate taxes, which is almost $1,200 lower than median real estate taxes paid in the U.S..
Wyoming rounds out the list of 10 states with the lowest property taxes with a 0.55% rate. Home median value in the Equality State is $266,400, which is $15,000 lower than the national home median value of $281,400. Homeowners in this state pay $1,452 annually in median real estate taxes, which is $1,343 less than the median real estate taxes paid in the U.S.
Property Tax Figures for All 50 States and Washington, D.C.
To see how your state compares with the rest of the country, we break down the median home value, median real estate taxes paid and the effective property tax rate for each state. Again, data for the table below comes from the Census Bureau’s 2021 1-year American Community Survey (ACS) Estimates.
|Location||Median Home Value||Median Real Estate Taxes Paid||Effective Property Tax Rate|
|District of Columbia||$669,900||$3,699||0.55%|
When preparing to buy a home, you must factor in how much you will pay for property taxes, which vary nationwide depending on your location. As an example, homeowners in New Jersey pay $8,796 annually, which is the highest rate in the country. This is just over three times the $2,795 median real estate taxes paid at the nationwide level. And, comparatively, Alabama homeowners pay only $674 per year, the lowest median real estate taxes in the U.S.
Tax Planning Tips for Homeowners
- A financial advisor can help you create a tax plan for your home and other real estate investments. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Property tax bills can change on an annual basis, depending on the value of the properties that you own. If you’re planning to buy a new home, SmartAsset’s property tax calculator can help you get the latest rates and forecast your annual property tax bill.
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