Property Tax Rates by State

The interiors, lighting and neighborhood of a house are the things we usually pay attention to while house hunting. But let’s all agree that we don’t really prepare ourselves to fall in love with the property tax rates too. Property taxes are just another tax that homeowners have to learn to embrace paying every year.

If it’s any consolation, the revenue collected goes towards benefitting the locality you live in. It funds public schools, the cleanliness of the streets in your vicinity and several other small operations. So, you could practically see what your money is going into. Before we get into the property tax rates for each state, let’s understand more about this tax.

CALCULATE MY MOVE

Introduction To Property Taxes in the U.S.

Property Taxes – What It Means For You As A Homeowner?

Property taxes are an annual figure paid by homeowners to the municipality or local government. If you fail to pay property taxes, then a tax lien will be put on your property. Do note that tax exemptions are provided to veterans, senior citizens and the taxable figure is also reduced for homesteaders. You may want to look further into this if it applies to you.

How Are Property Taxes Calculated?

In simple words, you pay based on how much your property is worth. The municipality of your district assesses the value of all the homes in your vicinity. That amount is then weighed against the expenses involved to maintain and execute certain operations for the betterment of the community.

After taking these two aspects into account, a tax rate is determined. Every homeowner in the locality must pay the same annual property tax. This in turn helps the county have enough funds to run the services they provide efficiently.

The town you reside in could potentially collect more property tax if they need funds to provide the county with more services. Keep in mind that property taxes vary based on city, county and state. There is no one rate that applies to all.

How Property Taxes Affect Buying A New Home?

When you’re buying a new home in a new city, you would inevitably want to know the finances you’d need to set aside for property taxes. Few ways you can do this is by observing the city and the locality you’ve picked.

Property taxes, like we said earlier, are assessed based on the value of your property and the funds needed to maintain the several services in the vicinity. So, try and notice things like if there’s a ton of public schools around? Is a new road getting constructed nearby? Or are there lots of new infrastructure coming up? By this you’d be able to gauge that the municipality is making improvements and would possibly collect a potentially higher property tax till those projects are completed.

How Can You Figure The Typical Property Tax Burden Of A Neighborhood?

Your property is usually assessed every year during the springtime (this varies from city to city, it could be three or five years too). If you notice a discrepancy in the property tax quoted on your tax bill, you can hire a realtor to understand the actual value of your property. Overall, we’d say that the amenities (retail stores, bus stops, parks) in the area do matter and largely affect the property tax you are going to pay.

  • Use websites like Zillow that give you the tax history of the house listed.
  • You can ask your realtor to help you with it.
  • If you like, you could probably probe a friendly neighbor to give you a ballpark figure.
  • You can check the county website itself to see if they have enclosed this information. It’s possible that you could find a table with tax rates for each county.
  • Find a reliable online property tax calculator. There are various tools that can help you get a figure for free.
  • Get in touch with the local tax assessor, which is a quick Google search away.
  • The website Redfin (a real estate website) is also a good online source to find the rough figures that people pay for property taxes.
  • Realtor.com is another real estate listing website that shares the property tax history of most of the homes they put up for sale on their website.

Also Read: The Lowest Cost of Living States in the US

CALCULATE MY MOVE

Property Tax Rates By States in America

Westernmost States

West Rocky Mountains

  • Arizona – 0.69%
  • Colorado – 0.53%
  • Idaho – 0.72%
  • Montana – 0.84%
  • Nevada – 0.64%
  • New Mexico – 0.79%
  • Utah – 0.64%
  • Wyoming – 0.61%

Key Takeaway – The property taxes in all eight of the mountainous portions of the western USA is certainly below the national average of 1.1%. Colorado, Wyoming, Nevada, Utah and Arizona are the top five western states with low property taxes.

West Pacific

  • California – 0.76%
  • Oregon – 1.01%
  • Washington – 1.01%

Key Takeaway – The West-Pacific is among the most desirable places to live in the country. If you’ve had your eye on any of these states, you’ll be glad to know that the property taxes aren’t ridiculously high.

The Midwest

  • Illinois – 2.30%
  • Indiana – 0.86%
  • Iowa – 1.56%
  • Kansas – 1.41%
  • Michigan – 1.58%
  • Minnesota – 1.13%
  • Missouri – 0.97%
  • Nebraska – 1.77%
  • North Dakota – 0.99%
  • Ohio – 1.58%
  • South Dakota – 1.32%
  • Wisconsin – 1.91%

Key Takeaway – Indiana, Missouri and North Dakota are the only Midwest states that present a property tax rate that is below the national average of 1.1%. Illinois is the only midwest state to be part of the top 10 states with the highest property tax rate in the country.

Also Read: 15 Reasons to Move to the Midwest

The Northeastern States

  • Connecticut – 2.11%
  • Maine – 1.36%
  • Massachusetts – 1.23%
  • New Hampshire – 2.20%
  • New Jersey – 2.47%
  • New York – 1.68%
  • Pennsylvania – 1.59%
  • Rhode Island – 1.66%
  • Vermont – 1.88%

Key Takeaway – The property tax rates in each of the Northeastern states in the USA is way above the national average of 1.1%. If you’d like to reside in the northeast but save on property taxes, then Massachusetts and Maine are your best bets.

The South

  • Alabama – 0.42%
  • Arkansas – 0.63%
  • Delaware – 0.56%
  • District of Columbia – 0.55%
  • Florida – 0.93%
  • Georgia – 0.91%
  • Kentucky – 0.73%
  • Louisiana – 0.53%
  • Maryland – 1.09%
  • Mississippi – 0.81%
  • North Carolina – 0.85%
  • Oklahoma – 0.90%
  • South Carolina – 0.57%
  • Tennessee – 0.73%
  • Texas – 1.81%
  • Virginia – 0.81%
  • West Virginia – 0.59%

Key Takeaway – Besides Texas, all the states situated in the South of the United States have property taxes that are relatively way lower than the national average (which is 1.1%).

See also: 13 Reasons to Move to the Southeast

Non-Contiguous States

  • Hawaii – 0.27%
  • Alaska – 1.18%

Key Takeaway – Property taxes in Hawaii are stunningly  low. Even though Alabama is the US state with the lowest property taxes, Hawaii’s tax rates are a game changer. For example, if you buy a home for $683,470 in Hawaii, you’ll pay 0.26% (which is $1,777) annually. But for the same house in Alabama, you’ll be shelling out 0.42% (which is $2,870). The margin on how much you could save annually speaks for itself.

Just a heads up that this list shares the median property tax rate by state, things would always vary depending on the city or county you pick to move. For data we turned to the most trusted personal finance website Business Insider as well as WalletHub.

CALCULATE MY MOVE

Glance At The Key Findings:

What is the nationwide average for property taxes?

1.1% of the home value is the national average that residents in the USA pay for property taxes.

State with highest property tax?

New Jersey with a property tax rate of 2.47%.

State with lowest property tax?

Alabama pays the least with a property tax rate of 0.42%. If you consider the non-contiguous states then Hawaii would take the spot with the lowest tax rate at 0.27%.

What are the top 10 states with high property tax?

  1. New Jersey – 2.47%
  2. Illinois – 2.30%
  3. New Hampshire – 2.20%
  4. Connecticut – 2.11%
  5. Wisconsin – 1.99%
  6. Vermont – 1.88%
  7. Texas – 1.81%
  8. Nebraska – 1.77%
  9. New York – 1.68%
  10. Rhode Island – 1.66%

What are the top 10 states that have the lowest property tax?

  1. Alabama – 0.42%
  2. Louisiana – 0.53%
  3. Washington, D.C. – 0.55%
  4. Delaware – 0.56%
  5. South Carolina – 0.57%
  6. West Virginia – 0.59%
  7. Wyoming – 0.61%
  8. Arkansas – 0.63%
  9. Nevada – 0.64%
  10. Arizona – 0.69%

Which are the regions in the US with high property tax?

States that lie in the New England region and Northeast corner of the United States have high property taxes.

Which are the regions in the US with low property tax?

Generally states that lie in the Midwest and South portions of the nation have low property tax. However, Arizona and Nevada are two westernmost states that also enjoy affordable property taxes.

Which state has the highest homeownership rate?

The state of West Virginia has the highest homeownership rate which is 72.5% (according to USA Today). The property tax percent here is at 0.59%, which we must say is pretty low. This factor probably encourages residents to own homes. We’d also like to share that the median value of homes in this state stands at $113,626, in case you’d like to consider seeing prospective homes in West Virginia.

Vermont, Minnesota, New Hampshire and Iowa are the other states with a high homeownership rate.

Which state has the lowest homeownership rate?

The state of New York has the lowest homeownership rate in the US. Only 53.7% of the population own a home. The property tax rate in New York is at a staggering 1.68%. The cost of living here is also among the highest in the nation, so these stats definitely correlate.

California, Hawaii, Nevada and Texas are the other states with a low homeownership rate.

CALCULATE MY MOVE

Strategies To Reduce Property Tax

If you feel that you’re paying way too much for property taxes annually, then here are few ways in which you can verify and reduce the tax percent.

Hire a property assessor to check the actual market value of your property. If the outcome is that the value is way lower than what has been calculated by the county, you can claim for a reduction.

Ask neighbors and confirm if they are paying the same rate as you. Try and find out why some properties have a smaller property tax rate to pay. One of the reasons some homeowners in the same vicinity pay less is that it could be a corner lot or a slightly smaller lot. Observe and look for such homes while house hunting so that you still get to enjoy the neighborhood but you pay lesser property tax.

If you run a business from your home, there could be certain exemptions for you. This also applies to veterans, senior citizens and so on. There are very few exceptional cases but it’s still worth a shot to look at these things to know if this could work in your favor.

FAQs

Which state has no property tax for seniors?

Senior citizens in the state of South Dakota can benefit from the state property tax relief program.  South Dakota is also among the few states to enjoy no state income tax. So it is a win-win situation for retirees.

Which states have the worst tax rates?

California, Hawaii, Connecticut and New York are few states that have it worst for residents taxwise.

Which are the most tax-friendly states in the US?

Wyoming, Nevada, Tennessee and Florida are some of the most tax-friendly states in the US.

Which state has the highest property tax for 2021?

The state of New Jersey has the highest property tax for the year 2021 in the US. The median property tax rate here is at 2.47%.

Which states have highest property taxes?

The states with the highest property taxes are:

  • New Jersey – 2.47%
  • Illinois –  2.30%
  • New Hampshire – 2.20%
  • Connecticut – 2.11%
  • Wisconsin – 1.91%
  • Vermont – 1.88%
  • Texas – 1.81%
  • Nebraska – 1.77%
  • New York – 1.68%
  • Rhode Island – 1.66%

Which states do not have property taxes?

Unfortunately, there are no states in the U.S with no property taxes. The government needs property taxes for different fundings like government services, police departments, water districts, public schools, libraries, etc.

What is the most heavily taxed state?

California is one of the most heavily taxed states in the U.S. The combined local and state level sales tax here can be about 8.66% on an average. Then there are also additional taxes levied to the purchase of gasoline (12 cents a gallon), approximately $2.87 for a pack of cigarettes, and an additional 33% for buying fruits from vending machines among other things. The other heavily taxed states are New Jersey, Vermont, Connecticut, Oregon and New York.

What is the least taxed state?

Alaska, South Dakota, Wyoming, Tennessee and Texas are some of the least taxed states in the U.S.

What state has no property tax for seniors?

South Dakota does have property taxes but it is one of the best states for retirees, especially because retired homeowners can be eligible for property tax relief programs. It’s basically a program where if eligible, you can get refunds on your property tax spends. To add to that, South Dakota doesn’t have any state or income taxes, so your retirement incomes such as pension or social security won’t be taxed.

What state has cheapest property taxes?

The state of Hawaii has the cheapest property taxes in the country which stands at 0.28% as the average effective property tax rate. The other states with cheap property taxes are Alabama, Louisiana, Wyoming and West Virginia.

Why are property taxes so high in California?

One of the reasons for the property taxes being high in California is that based on the rate of the inflation in the state, the assessed value of homes keeps increasing. So, in  simple terms, the property taxes depend on the purchased value of the house.

Why is Texas property tax so high?

Property taxes are calculated depending on the percentage of your home value. In recent years, the value of real estate in the state has been increasing. That’s why the greater the value of your home, the higher your property taxes will be. To add to that, each Texan local authority has the autonomy to set their respective taxes, so local governments can set it high to meet the demands of the local counties infrastructure.

Texas uses its property taxes for funding essential resources like road maintenance, safety measures, schools and libraries, etc. But since Texas has no income tax to contribute to the state’s taxation revenue, property taxes are higher to make up for it.

How can I live tax free?

You can live in the U.S by paying almost no or limited taxes by being a part-time resident or getting a tourist visa and living in areas near the country. Also, if you are an international student with F, J, M or Q visa, you’ll be exempted from the Substantial Presence Test for your first five years in the state. Even scholars can live tax free for two years in the state,  after which they need to pay the taxes.

CALCULATE MY MOVE


Conclusion

Property taxes are things that cannot be avoided when you’re a homeowner. But when you get your first property tax bill as a new homeowner, you shouldn’t be surprised by the amount that appears there. This is why we highly recommend taking property taxes into consideration during a house hunt.

Learning more about how much you’d probably need to set aside beforehand will help you manage your budget better. As reports show, not all states share the same property tax percent. It varies from cities, counties and states. Overall, there’s several variables at play and it’s worth keeping these things in mind while looking for a new place to call home.

See also: Should You Move to a State with No Income Tax