States without property taxes: Unpacking the myth

Though some states have earned reputations as tax havens for having lower property taxes and others like Florida have floated the idea of eliminating certain property taxes, there are no states in the United States with no property taxes.

We’ll break down the basics of property tax, how it works, which states tend to have the lowest taxes, and strategies for finding tax relief.

What are property taxes, and how are they calculated?

Property taxes are annual fees you pay to your local governments based on your home’s assessed value. Your tax bill gets calculated by multiplying this assessed value by the local mill rate (the tax rate per $1,000 of assessed value).

For example, if you own a home with an assessed value of $300,000 and the local mill rate is $17.20 per $1,000 in value, you’ll pay 300 * $17.20 = $5,160 per year in property tax.

The money from property taxes typically goes toward local government services, making them an important way to fund things like roads, parks, schools, libraries, and emergency services.

Because of the rising home values across the country, homeowners are facing larger real estate taxes. For example, Colorado, Georgia, and Florida had the largest annual property tax surges, with increases of 10.6%, 10.3%, and 9.5%, respectively, from 2023 to 2024.

This matters for your wallet because property taxes become part of your monthly mortgage payment through escrow, affecting your carrying costs and long-term affordability. When your home’s assessed value jumps up, your monthly housing payment can increase even if your mortgage rate stays the same.

Are there any states with no property tax?

No states in the United States have eliminated real estate property taxes. There are some states with no or low state-level property taxes, but local governments, like county, city, or special districts will still charge property taxes.

The zero property tax myth persists because people sometimes confuse a lack of state-level property tax or low state-level property tax rates with having property taxes at all. Plus, generous exemptions can make some homeowners feel like they're paying almost nothing.

Here are a few realistic strategies that can help you reduce your tax burden:

• Look at neighboring counties or towns: Property tax rates can vary even in the same metropolitan area. A 20-minute drive to a different county or town could save you thousands annually while keeping you close to work and family.
• Plan your retirement: States like Florida and Texas offer nice combinations of no state income tax and senior exemptions.
• Claim every exemption you qualify for: Veterans, seniors, disabled homeowners, and low-income families often qualify for substantial property tax reductions.

While there isn’t a state with no income or property tax, there are some states where you’ll pay very little, depending on your circumstances.

What is ‘‘overall tax burden’’?

Your overall tax burden is the total percentage of your income that goes to all taxes combined, including property taxes, income taxes, sales taxes, and other state and local fees.

When states lower property taxes, they typically raise money somewhere else, such as by levying a higher income tax or charging a sales tax.

States with the lowest property taxes

Property tax rates depend on how states fund their schools and local services. States that rely more heavily on income taxes or sales taxes can afford to keep property taxes lower.

This table shows the ten states with the lowest property tax rates:

Keep in mind that effective tax rates compare the amount charged to property value. Two properties with a tax burden of $5,000 would have different effective rates if one were worth $250,000 and the other $500,00 despite the bill being the same.

Common property tax relief programs

Property tax relief programs can slash your annual bill by hundreds or thousands of dollars. These tax exemptions work by either reducing your home's taxable value or providing direct credits against your tax bill.

Homestead exemptions

Homestead exemptions reduce the taxable value of your primary residence, lowering your property tax bill. These exemptions only apply to the home where you live, not investment properties or vacation homes.

For example, Florida has one of the most generous homestead exemptions in the country. Homeowners can exempt up to $50,000 of their home's value from taxation. For a home valued at $300,000, this exemption could save over $1,000 annually, depending on local tax rates.

Senior and retiree exemptions

Senior and retiree exemptions help older Americans who often live on fixed incomes but still face rising property taxes. These programs either freeze your tax bill at current levels, reduce your taxable value, or provide income-based relief.

For example, Texas has one of the strongest senior protections through its over-65 tax freeze. Once you turn 65, your school district property taxes get locked at their current dollar amount forever.

Seniors may also save on property taxes in these states:

• Alaska
• Florida
• Georgia
• South Dakota
• Louisiana
• West Virginia
• Washington, D.C.

Each state has different age requirements, income limits, and benefit amounts, so do your research. Once the time comes, you may also consider moving to a retiree-friendly state.

Veterans tax relief

U.S. military veterans and their families have access to property tax relief programs based on disability rating or length of service. Many states and territories have these benefits, but eligibility requirements and the savings available can vary.

For example, Alaska offers exemptions up to $150,000 of property value if you are at least 50% disabled, while Arizona offers a full exemption to those with 100% disability and incomes below $39,865 or $47,826 depending on whether you have minor children.

Military families can explore both property tax exemptions and VA loan¹ programs. Also, there are benefits to buying a house in the military that you should know about. 

If you're a disabled veteran, contact your county tax assessor's office or state veterans affairs department. Your local veterans service organization can help you navigate applications and claim all available benefits.

Don’t assume you won't qualify. Even veterans with lower disability ratings often find meaningful relief.

Is moving to a low property tax state right for you?

Moving to a low property tax state might be right for you, but it’s important to look at the whole picture. A state with low property taxes might hit you with higher costs elsewhere.

Take a holistic view and consider these factors together:

• Cost of living: Your property tax savings might disappear if everything else costs more.
• Home prices: A 0.3% property tax rate sounds great until you discover homes cost twice as much (and as a result, you pay more in property taxes).
• Job opportunities: Lower taxes won't help if you can't find work or must take a significant pay cut.
• Quality of life: The cheapest option isn't always the best option for your happiness and long-term goals.

There are often ways to lower your tax burden where you already live, so check with your local government to see what exemptions are available or consider asking the local assessor to examine your house if you feel that your taxes are too high.

How to lower your property tax bill

You have more control over your property tax bill than you might think. Here are some strategies to help put money back in your pocket:

• Appeal your property tax assessment: If your home's assessed value seems too high compared to recent sales in your neighborhood, you can formally challenge it.
• Apply for exemptions early: Don't wait until tax bills arrive. Many exemptions require that your application be filed in advance with strict deadlines.
• Understand your local tax rates: Property taxes are set by multiple entities, such as your county, city, school district, and special districts. Knowing who sets what rates helps you vote smarter and understand where increases come from.
• Monitor changes in property values: Keep track of home sales in your area and your property's assessed value compared to market reality. Staying informed helps you spot assessment errors quickly.

If you feel like you’re paying too much in property taxes but aren’t sure how to fix it, you may want to consult with a tax professional.

FAQ

Which U.S. state has the lowest property tax?

Hawaii has the lowest average property taxes at 0.29%, with Alabama taking second place at 0.37%. However, remember that low rates don't always mean low bills if home values are high in your area.

Do retirees still pay property tax?

Yes, retirees still pay property taxes, but many states have exemptions and freezes for seniors. The benefits of these programs vary based on age, income, and/or disability status.

How often can I appeal my property tax?

It depends on where you’re based, but you can typically appeal your property tax assessment once per year. Make sure to do it by your state’s deadline.

What is the least tax-friendly state?

New Jersey has some of the highest property taxes in the country at 1.88%. New York, California, and Connecticut also often appear on "highest tax burden" lists because of high property, sales, and income taxes.

The bottom line: Take a holistic view of your property taxes

No state offers a complete escape from property taxes, but you have opportunities to reduce your burden. Make sure to claim every exemption you qualify for, including the homestead one. If you're considering a move for tax reasons, crunch the numbers on the total cost of living to understand how much lower property taxes will save you.

If you decide to move, you can reach out to Rocket Mortgage and apply for a home loan today.

¹ Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.