States Without Property Tax: From Lowest to Highest (2026)

There are no US states without property tax.

Property tax is levied in every state, almost entirely by local governments such as counties, cities and school districts, to fund schools, roads, police, and fire departments.

The states with the lowest effective property tax rates are Hawaii (0.27%) and Alabama (0.38%), while the highest are Illinois (1.92%) and New Jersey (1.89%), followed by Connecticut (1.66%).

Illinois and New Jersey sit close enough together that some published rankings put New Jersey first. For real estate investors, the effective rate and how local assessors classify investment property matter more than the headline figure.

Key takeaways

• No US state has zero property tax. The lowest effective rate is Hawaii at 0.27%.
• Illinois has the highest effective property tax rate at 1.92% on this measure, with New Jersey just behind at 1.89%. The Tax Foundation's five-year data puts New Jersey first.
• Every property tax figure on this page is 2024 data, the most recent full year available.
• Effective rates in 2024 ranged from about 0.27% (Hawaii) to 1.92% (Illinois) of home value.
• Rentals usually carry a higher effective property tax bill than owner-occupied homes, mostly through lost exemptions and a different assessment class rather than a higher valuation.
• Property tax on a rental is a deductible operating expense, and the SALT cap does not apply to it.

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 property tax is levied everywhere in the US, at county, city or school district 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 classified and 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: 0.27% effective rate (about $2,385 on the median-value home)
2. Alabama: 0.38% effective rate (about $890 on the median-value home)
3. Idaho: 0.43% effective rate (about $1,912 on the median-value home)
4. Arizona: 0.43% effective rate (about $1,828 on the median-value home)
5. South Carolina: 0.45% effective rate (about $1,337 on the median-value home)
6. Tennessee: 0.45% effective rate (about $1,488 on the median-value home)
7. Nevada: 0.47% effective rate (about $2,143 on the median-value home)
8. Delaware: 0.47% effective rate (about $1,750 on the median-value home)
9. Utah: 0.49% effective rate (about $2,648 on the median-value home)
10. Colorado: 0.49% effective rate (about $2,828 on the median-value home)

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. Illinois: 1.92% effective rate (about $5,399 on the median-value home)
2. New Jersey: 1.89% effective rate (about $9,358 on the median-value home)
3. Connecticut: 1.66% effective rate (about $6,573 on the median-value home)
4. New Hampshire: 1.46% effective rate (about $6,707 on the median-value home)
5. New York: 1.45% effective rate (about $6,542 on the median-value home)
6. Nebraska: 1.42% effective rate (about $3,739 on the median-value home)
7. Vermont: 1.42% effective rate (about $5,026 on the median-value home)
8. Texas: 1.31% effective rate (about $4,108 on the median-value home)
9. Iowa: 1.29% effective rate (about $2,937 on the median-value home)
10. Wisconsin: 1.25% effective rate (about $3,680 on the median-value home)

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Illinois and New Jersey are the two highest-taxed states on this measure, and they sit close enough that the order depends on which dataset you use. On the median-based 2024 ACS figures used here, Illinois edges ahead.

The Tax Foundation's 2026 edition shows both at 1.88% on five-year data but ranks New Jersey first on the unrounded figure. New Jersey's higher home values still give it much the larger typical bill, roughly $9,400 against about $5,400 in Illinois.

Texas and New Hampshire rank high partly because they have no state income tax and lean on property tax instead. Rates are set locally, so confirm the exact rate for any county or city before you buy, and see the Tax Foundation property tax data for county-level detail.

All 50 states ranked by property tax rate (2024 data)

The table below ranks every US state, plus Washington, D.C., from the lowest to the highest effective property tax rate, using 2024 U.S. Census American Community Survey one-year data. The effective rate is the median real estate tax paid divided by the median owner-occupied home value. Rates are set locally, so your county or city rate may differ.

Effective rates are calculated from the American Community Survey 2024 one-year estimates: median real estate taxes paid (table B25103) and median value of owner-occupied housing units (table B25077). Rates are shown to two decimal places. Where two states appear to share a rate, the ranking is set by the unrounded figure. Idaho and Arizona both show 0.43%, for example, but Idaho's unrounded rate is fractionally lower.

Why our figures differ from other property tax rankings

If you compare this table with another published ranking you will find different numbers, and often a different order at the top. That is not an error in either place. It is a methodology difference, and it is worth understanding before you rely on any single figure.

There are two choices every publisher has to make, and they change the answer.

Median-based or aggregate-based

A median-based rate divides the median tax bill by the median home value. That is the method used on this page. An aggregate-based rate divides total taxes paid across the state by the total value of housing stock. Aggregate methods weight expensive properties more heavily, so they usually produce lower headline rates.

One-year or five-year Census estimates

The American Community Survey publishes both. One-year estimates are more current. Five-year estimates are smoothed across a longer window and are more stable for small populations. The same state can move several places depending on which one is used.

Here is how the two highest-taxed states look across four published 2024 analyses.

Of the three analyses that rank both states, two put Illinois top and the Tax Foundation's 2026 edition puts New Jersey first; NAHB's Eye On Housing does not publish a New Jersey figure. The two states are close enough that the order follows the method rather than either source being wrong. The practical takeaway for an investor is simple: never budget from a national ranking. Get the rate from the county assessor for the specific parcel you are buying.

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.

States with property tax exemptions for seniors and veterans

Headline rates are not what many households actually pay. Every state runs some form of relief program, and the reductions can be large enough to change which state is cheapest for a given buyer. Programs are set at state and often county level, so the detail varies, but they fall into five recognizable types.

• Homestead exemptions. A fixed amount or percentage taken off the assessed value of an owner-occupied primary residence. These almost never apply to a rental property, which is the single most common surprise for new investors.
• Age-based exemptions. An additional reduction for owner-occupiers above a set age, commonly 65, often with an income test attached.
• Assessment freezes and tax ceilings. Rather than reducing the bill, these lock the assessed value or the tax amount at the level it reached in a qualifying year, so future increases do not apply.
• Veteran and disability exemptions. Many states offer a partial reduction for veterans and a full or near-full exemption for veterans with a total service-connected disability. Some extend it to a surviving spouse.
• Circuit breakers and deferrals. Circuit breakers cap the bill as a share of household income. Deferrals postpone payment, usually until the property is sold, with interest.

Two things matter for investors specifically. First, almost all of these attach to owner-occupancy, so buying a property from an exempt owner often means the tax bill rises the year you take it on. The seller's tax history is not your tax future. Second, exemptions are rarely automatic. Most require an application by a deadline, and an unclaimed exemption is simply lost for that year.

Because thresholds, amounts and deadlines change frequently and vary by county, check the current rules with the assessor for the county the property sits in rather than relying on any national summary, this one included.

Do investors pay more property tax than owner-occupiers?

Generally, yes, but usually not because the assessor puts a higher market value on the building. A single-family rental is normally valued the same way as the house next door. The higher bill comes from three things instead. Many jurisdictions place non-owner-occupied property in a different assessment class with a higher assessment ratio. Owner-occupier exemptions such as homestead exemptions do not apply. And assessment caps that limit how fast the taxable value of a primary residence can rise are often looser, or absent, for rentals.

Income-approach valuation, where an assessor values a property from the rent it produces, does apply, but mainly to commercial and larger multifamily property rather than to a single-family rental.

This can surprise newer investors who budgeted for the owner-occupier bill 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 classified and assessed, and whether the rate or ratio 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 neighboring 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 SALT cap does not apply to rental property. This is the point most guides skip. The state and local tax deduction limit is $40,400 for the 2026 tax year, or $20,200 if married filing separately, and it applies to itemized deductions on Schedule A for a personal residence.

Property tax on a rental is a rental business expense on Schedule E and is not capped by SALT. If you own both a home and rentals, the two are treated separately and only the personal residence portion counts toward the limit.

See deductible expenses for landlords for the full list, and how to reduce tax on rental income for the wider strategies, including depreciation and depreciation recapture.

The simplest way to keep those records is with property management and accounting software built for landlords.

‍Landlord Studio lets you digitize 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 maximize 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. Property tax applies in every US state, levied by local governments to fund local services. Some individual cities have very low or no municipal property tax, but no state is property-tax free.

Do all states have property tax?

Yes. Property tax on real estate applies in all 50 states and the District of Columbia. It is levied and collected almost entirely by local governments rather than by the states themselves, and there is no federal property tax. It is the main funding source for schools, emergency services and local infrastructure. What varies is the rate, the assessment method and the relief programs available, not whether the tax exists.

Which states have no property tax on homes?

None. Residential real estate is taxable in every state. The closest thing to an exception is a small number of individual municipalities that levy no city-level property tax, such as Stafford, Texas, though owners there still pay county and school district taxes. If you are looking for the lowest cost of ownership, Hawaii has the lowest effective rate at 0.27% and Alabama and West Virginia have the lowest typical bills.

Are there any states with no property tax for seniors?

No state exempts seniors from property tax entirely, but most offer meaningful relief. The common forms are an additional homestead exemption for owner-occupiers above a set age, an assessment freeze that locks the taxable value, a circuit breaker that caps the bill as a share of income, and a deferral that postpones payment until the property is sold. Almost all require an application by a deadline and apply only to a primary residence, not to rentals.

Which state has the lowest property tax?

Hawaii has the lowest effective property tax rate at 0.27%, followed by Alabama at 0.38%. Because Hawaii home values are high, Alabama and West Virginia often have the lowest actual bills.

Which state has the highest property tax?

Illinois has the highest effective rate at 1.92% on the median-based 2024 figures used here, followed by New Jersey at 1.89% and Connecticut at 1.66%. The Tax Foundation's five-year figures show both Illinois and New Jersey at 1.88% and rank New Jersey first. New Jersey's typical bill still exceeds $9,000 because of higher home values.

Do landlords pay more property tax than homeowners?

Often yes. The higher bill usually comes from a different assessment class for non-owner-occupied property, owner-occupier exemptions that do not apply to rentals, and assessment caps that are looser or absent for rentals, rather than from a higher valuation of the building itself.

Can you deduct property taxes on a rental property?

Yes. Property tax on a rental is a deductible operating expense reported against rental income on Schedule E, and it is not subject to the SALT cap that limits the deduction on a personal residence. 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 0.27% in Hawaii to 1.92% in Illinois, and a rental usually carries a higher effective bill than an owner-occupied home. Before buying in a new market, confirm the local rate with the county assessor and how the property will be classified and 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.

All property tax figures on this page reflect 2024 data, the most recent full year published, and were last checked against source on 18 September 2026. Rates are set locally and change annually. This page is general information, not tax advice. Confirm the current rate and any exemptions with the assessor for the county the property sits in.