States Without Property Tax: From Lowest to Highest

There are no US states without property tax. Every state levies property tax to fund local services such as schools, roads, police, and fire departments. The states with the lowest effective property tax rates are Hawaii (0.29%) and Alabama (0.37%), while the highest are New Jersey and Illinois (both 1.88%), followed by Connecticut (1.54%). For real estate investors, the effective rate and how local assessors value investment property matter more than the headline figure.

Key takeaways

• No US state has zero property tax. The lowest effective rate is Hawaii at 0.29%.
• New Jersey and Illinois have the highest effective property tax rates, both 1.88%.
• Effective rates in 2024 ranged from about 0.29% to 1.88% of home value.
• Investment properties are often assessed at a higher value than owner-occupied homes.
• Property tax on a rental is a deductible operating expense.

Are there any states with no property tax?

No. There are no states without property tax, because property tax is a primary way local governments fund public services like schools, emergency services, infrastructure, and libraries. A small number of individual cities have very low or no municipal property tax (for example, Stafford, Texas), but every state collects property tax at some level.

That does not mean all states are equal. The effective rate (the share of a home's value paid in tax each year) varies widely, and so does how investment property is assessed.

What are real estate (property) taxes?

Real estate taxes, also called real property taxes, are taxes on immovable property such as land, houses, condos, and rental buildings. They are assessed and collected by state and local governments and fund local services.

Personal property tax is a separate category that applies to movable items such as vehicles, equipment, and in some jurisdictions mobile homes. Intangible assets like bank accounts and investments usually fall outside personal property tax. When people say "property tax" they almost always mean real estate tax.

Which 10 states have the lowest property tax?

These states had the lowest effective property tax rates in 2024, based on U.S. Census American Community Survey data. The figure in brackets is the approximate annual tax on the state's median-value home.

1. Hawaii: 0.29% effective rate (about $2,440 on the median-value home)
2. Alabama: 0.37% (about $674)
3. Arizona: 0.48% (about $1,319)
4. Utah: 0.48% (about $2,548)
5. South Carolina: 0.49% (about $1,460)
6. Colorado: 0.50% (about $2,759)
7. Idaho: 0.50% (about $2,310)
8. Nevada: 0.50% (about $2,242)
9. West Virginia: 0.51% (about $855)
10. Tennessee: 0.52% (about $1,660)

Hawaii has the lowest effective rate in the country, though its high home values mean the actual bill is not the smallest. For a low rate and a low bill, Alabama and West Virginia stand out.

Which 10 states have the highest property tax?

At the other end, these states had the highest effective property tax rates in 2024.

1. New Jersey: 1.88% effective rate (about $10,309 on the median-value home)
2. Illinois: 1.88% (about $5,136)
3. Connecticut: 1.54% (about $6,378)
4. Vermont: 1.51% (about $5,873)
5. New Hampshire: 1.50% (about $7,312)
6. Nebraska: 1.44% (about $3,814)
7. Texas: 1.40% (about $4,246)
8. Ohio: 1.36% (about $3,195)
9. Iowa: 1.33% (about $2,926)
10. Wisconsin: 1.32% (about $4,123)

New Jersey and Illinois are tied on rate, but New Jersey's higher home values push its typical bill above $10,000. Texas and New Hampshire rank high partly because they have no state income tax and lean on property tax instead. Figures are effective rates from the 2024 U.S. Census American Community Survey (compiled June 2026); rates are set locally, so confirm the exact rate for any county or city before you buy. See the Tax Foundation property tax data for county-level detail.

How are property taxes calculated?

Property tax is calculated by applying the local tax rate to your property's assessed value. Methods vary by location but follow the same basic steps.

Step 1: Property assessment

An assessor estimates the property's market value, often using recent comparable sales, the replacement cost method, or, for commercial property, the income method. Assessments happen as often as annually or less frequently depending on local law.

Step 2: Applying the rate

The assessor applies the rate to the assessed value. For example, a property assessed at $200,000 in a jurisdiction with a 1.5% rate owes $3,000. Many areas express this as a mill rate, where one mill equals $1 per $1,000 of assessed value.

Do investors pay more property tax than owner-occupiers?

Generally, yes. Local governments often assess rental and investment property at a higher value than owner-occupied homes because an income-producing asset is treated as more valuable. Many owner-occupier exemptions (such as homestead exemptions) also do not apply to rentals.

This can surprise newer investors who budgeted for the owner-occupier rate and then find their cash flow is lower than forecast. As part of due diligence, contact the local tax assessor to confirm how the property will be assessed and whether the rate changes for a non-owner-occupant.

5 ways to reduce your real estate tax bill

1. Make sure the assessor has correct property details (lot size, square footage, bedrooms, bathrooms, build date, condition).
2. Avoid value-adding structural changes unless the long-term return outweighs the higher assessment.
3. Keep curb appeal modest, since nicer-looking properties can be assessed higher.
4. Check that your assessment is in line with comparable neighbouring properties.
5. Request a reassessment, with evidence such as comparable sales, if you believe your property is overvalued.

Can you deduct property tax on a rental property?

Yes. Property tax on a rental is a deductible operating expense you report against rental income, so a higher property tax bill is partly offset at tax time. To claim it accurately you need clean records of every expense across the year.

The simplest way to keep those records is with property management and accounting software built for landlords. Landlord Studio lets you digitise receipts, sync bank accounts, reconcile transactions, and generate over 15 accountant-approved reports, and it is free for your first three properties. Common rental write-offs include mortgage interest, insurance, maintenance and repairs, travel, professional and management fees, legal and tax-prep fees, and property tax itself.

Save time and maximise your deductions with real estate accounting software designed for landlords. Create your free Landlord Studio account today.

Frequently Asked Questions

Are there any states with no property tax?

No. Every US state charges property tax to fund local services. Some individual cities have very low or no municipal property tax, but no state is property-tax free.

Which state has the lowest property tax?

Hawaii has the lowest effective property tax rate at 0.29%, followed by Alabama at 0.37%. Because Hawaii home values are high, Alabama and West Virginia often have the lowest actual bills.

Which state has the highest property tax?

New Jersey and Illinois have the highest effective rates, both 1.88%, followed by Connecticut at 1.54%. New Jersey's typical bill exceeds $10,000 because of higher home values.

Do landlords pay more property tax than homeowners?

Often yes. Rental and investment properties are frequently assessed at a higher value than owner-occupied homes, and owner-occupier exemptions usually do not apply to rentals.

Can you deduct property taxes on a rental property?

Yes. Property tax on a rental is a deductible operating expense reported against rental income. Keep accurate records of all property expenses so you can claim every deduction you are entitled to.

The bottom line

There are no states without property tax, but the effective rate ranges from 0.29% in Hawaii to 1.88% in New Jersey and Illinois, and investment property is often assessed higher than owner-occupied homes. Before buying in a new market, confirm the local rate and how the property will be assessed, then put systems in place to track income and expenses so you can claim every deduction, including property tax, at year end. Key investment metrics to model alongside tax include cap rate and the marginal rental income tax rate in your target state.