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Property Taxes By State: A Comparative Look At The Highest To Lowest States

4-minute read

July 13, 2021

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Searching for a new home comes with several considerations. Often, we value the community our home is in as a top priority. But financially supporting the local area, like schools and infrastructure, comes with property taxes. In all 50 U.S. states, laws require the majority of property owners to pay real estate taxes, and property taxes vary by state.

If you are considering a real estate search, you’ll want to think about the location’s property taxes since they add to your homeownership costs. With that in mind, here is a basic rundown on the financial charge and a list of property taxes by state to help you start.

What Are Property Taxes?

Property taxes, or real estate taxes, are paid by a real estate owner to county or local tax authorities. The amount is based on the assessed value of your home and vary depending on your state’s property tax rate. Most U.S. homeowners have to pay these fees, usually on a monthly basis, in combination with their mortgage payments. If you pay off your loan, you receive a bill for the tax from local government occasionally during the year.

The money used for the property tax goes toward the community. It supports infrastructure improvements, public services and local public schooling.

What Are Property Taxes Based On?

While your home’s assessed value for property taxes may match its actual value, that won’t always be the case. That gap can affect your tax amount. What you’ll pay in property taxes ranges depending on the state and county you live in as well as the overall value of your home. That includes both the land itself and the structures on it. So, vacant land will likely have lower real estate taxes due to a lower assessed value.

Assessment is based on a unit called a mill, equal to one-thousandth of a dollar. Assessors find annual property tax liability by multiplying three values:

  • the state tax rate,
  • the assessment ratio (the portion of the property value subject to tax),
  • and the property value.

Some of these values fluctuate according to the market and state.

States do their property assessments at different frequencies, some annually and others every couple of years.

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States Ranked By Property Tax

Here is a list of states in order of lowest ranking property tax to highest:

 

Rank

State

Real Estate Tax Rate

Average Home Price

Annual Property Tax

1

Hawaii

0.28%

$615,300

$606

2

Alabama

0.41%

$142,700

$895

3

Colorado

0.51%

$343,300

$1,113

4

Louisiana

0.55%

$163,100

$1,187

5

District of Columbia

0.56%

$601,500

$1,221

6

South Carolina

0.57%

$162,300

$1,238

7

Delaware

0.57%

$251,100

$1,240

8

West Virginia

0.58%

$119,600

$1,269

9

Nevada

0.60%

$267,900

$1,310

10

Wyoming

0.61%

$220,500

$1,319

11

Arkansas

0.62%

$127,800

$1,358

12

Utah

0.63%

$279,100

$1,362

13

Arizona

0.66%

$225,500

$1,446

14

Idaho

0.69%

$212,300

$1,492

15

Tennessee

0.71%

$167,200

$1,548

16

California

0.76%

$505,000

$1,644

17

New Mexico

0.80%

$171,400

$1,740

18

Mississippi

0.81%

$119,000

$1,751

19

Virginia

0.82%

$273,100

$1,779

20

Montana

0.84%

$230,600

$1,818

21

North Carolina

0.84%

$172,500

$1,833

22

Indiana

0.85%

$141,700

$1,853

23

Kentucky

0.86%

$141,000

$1,866

24

Florida

0.89%

$215,300

$1,934

25

Oklahoma

0.90%

$136,800

$1,952

26

Georgia

0.92%

$176,000

$2,006

27

Missouri

0.97%

$157,200

$2,111

28

Oregon

0.97%

$312,200

$2,116

29

North Dakota

0.98%

$339,000

$2,138

30

Washington

0.98%

$193,900

$2,134

31

Maryland

1.09%

$314,800

$2,370

32

Minnesota

1.12%

$223,900

$2,429

33

Alaska

1.19%

$270,400

$2,599

34

Massachusetts

1.23%

$381,600

$2,667

35

South Dakota

1.31%

$167,100

$2,857

36

Maine

1.36%

$190,400

$2,953

37

Kansas

1.41%

$151,900

$3,060

38

Michigan

1.54%

$154,900

$3,343

39

Ohio

1.56%

$145,700

$3,390

40

Iowa

1.57%

$147,800

$3,407

41

Pennsylvania

1.58%

$180,200

$3,442

42

Rhode Island

1.63%

$261,900

$3,548

43

New York

1.72%

$313,700

$3,749

44

Nebraska

1.73%

$155,800

$3,754

45

Texas

1.80%

$172,500

$3,907

46

Wisconsin

1.85%

$180,600

$4,027

47

Vermont

1.90%

$227,700

$4,135

48

Connecticut

2.14%

$275,400

$4,658

49

New Hampshire

2.18%

$261,700

$4,738

50

Illinois

2.27%

$194,500

$4,942

51

New Jersey

2.49%

$335,600

$5,419

 

Please note: this data is based on WalletHub’s 2021 findings; however, the numbers pull from the 2019 census. So, you may see some fluctuation between the numbers mentioned above and other reports, particularly the median home value. Prices may also change depending on market influences.

State Property Tax Exemptions

While most U.S. homeowners must pay property taxes, some properties are exempt. This differs from a tax deduction, which only lowers an individual or group’s tax liability. Property tax exemptions include qualifying individuals, such as senior citizens, STAR (School Tax Relief) participants, those with disabilities and veterans. Certain eligible government, nonprofit, and religious entities may also fall under an exemption.

Vulnerable or low-income homeowners are typically the target of many property exemption programs, whether they lower or eliminate the property taxes. However, even taxpayers who use their home as their primary residence may qualify for the Homestead Exemption. It’s also possible to apply for multiple exemptions if you live in certain areas. Thus, a wide range of people may be able to save thousands on real estate tax.

Eligibility may shift depending on your state’s laws, your local municipality, and your situation. Check with the appropriate local services if you need help navigating the available programs.

The Bottom Line: Property Taxes Vary From State To State

You may live in an area that levies significant property taxes or caps exemptions at a low threshold. If you are struggling to afford your current tax liability, consider refinancing your property, as it can help lower the costs tied to owning a home.

Of course, take the time to research your options and find the most comfortable solution for your financial situation.

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