Real-Estate Property Taxes by State
What states have the lowest property taxes?
Property taxes are one of the annual expenses that some buyers may not include in their calculations of the total cost of owning a primary residence or vacation home. However, they are a substantial expense and they can vary by several thousand dollars a year depending on your state or local jurisdiction.
The amount of property tax owed depends on the appraised fair market value of the property, as determined by the property tax assessor. Appraisals are conducted annually and reflect changing home values. Property tax liability is calculated by multiplying the nominal property tax rate by the assessment ratio (the percentage of the value of the property that is taxed) by the value of the property. Property taxes are levied by counties, cities, or special tax districts on most types of real estate- including homes, businesses, and parcels of land.
Higher property taxes are not necessarily a bad thing, especially if you are looking for a community with good schools. School funding comes from a combination of three sources: about 45 percent of school funding comes from local money (primarily property taxes), 45 percent from the state and 10 percent federal. In every state, though, inequity between wealthier and poorer districts continues to exist. That’s often because education is paid for with the amount of money available in a district. Thus, students in higher-income towns with higher home values tend to have easy access to guidance counselors, school psychologists, personal laptops, and up-to-date textbooks, while those in high-poverty areas don’t.
Like most taxes, property taxes are more likely to rise than fall. Even though they receive annual assessments and tax bill, many homeowners may not pay close attention to tax increases because they choose to pay taxes through an escrow account managed by their mortgage servicer. Homeowners who pay taxes and homeowners insurance through an escrow account receive a single monthly bill that includes their mortgage and escrow payments, which spread the cost of property taxes over a six or 12-month period.
Below is a ranking of states from Wallethub based on the effective real estate property tax rates in 2017. Using $179,000 as a median home value, the table provides a general idea of what annual property taxes will be in each state.
However, effective property tax rates differ widely across and within states, making them difficult to compare. In addition to variation in statutory tax rates, local governments use various methods to calculate their real property tax base. The Smart Asset website provides a property tax calculator that you can use to find local property tax rates by ZIP Codes and get an estimate of annual property taxes based on assessed valuation of a home.
Real-Estate Property Taxes by State
| Rank | State | Effective Real-Estate Tax Rate |
Annual Taxes on a $179K Home* |
State Median Home Value |
Annual Taxes on Home at State Median Value |
| 1 | Hawaii | 0.27% | $487 | $515,300 | $1,406 |
| 2 | Alabama | 0.43% | $773 | $125,500 | $543 |
| 3 | Louisiana | 0.49% | $876 | $144,100 | $707 |
| 4 | Delaware | 0.54% | $959 | $231,500 | $1,243 |
| 5 | District of Columbia | 0.56% | $1,000 | $475,800 | $2,665 |
| 6 | South Carolina | 0.57% | $1,019 | $139,900 | $798 |
| 7 | West Virginia | 0.58% | $1,044 | $103,800 | $607 |
| 8 | Colorado | 0.60% | $1,073 | $247,800 | $1,489 |
| 9 | Wyoming | 0.61% | $1,097 | $194,800 | $1,196 |
| 10 | Arkansas | 0.62% | $1,111 | $111,400 | $693 |
| 11 | Utah | 0.68% | $1,218 | $215,900 | $1,472 |
| 12 | New Mexico | 0.74% | $1,324 | $160,300 | $1,188 |
| 13 | Tennessee | 0.75% | $1,335 | $142,100 | $1,062 |
| 14 | Idaho | 0.76% | $1,366 | $162,900 | $1,246 |
| 15 | Mississippi | 0.79% | $1,408 | $103,100 | $813 |
| 16 | Virginia | 0.80% | $1,420 | $245,000 | $1,948 |
| 17 (tie) | California | 0.81% | $1,438 | $385,500 | $3,104 |
| 17 (tie) | Arizona | 0.81% | $1,446 | $167,500 | $1,356 |
| 19 (tie) | Montana | 0.85% | $1,525 | $193,500 | $1,652 |
| 19 (tie) | Kentucky | 0.85% | $1,511 | $123,200 | $1,042 |
| 19 (tie) | North Carolina | 0.85% | $1,524 | $154,900 | $1,322 |
| 19 (tie) | Nevada | 0.85% | $1,523 | $173,700 | $1,481 |
| 23 | Indiana | 0.87% | $1,560 | $124,200 | $1,085 |
| 24 | Oklahoma | 0.88% | $1,569 | $117,900 | $1,036 |
| 25 | Georgia | 0.94% | $1,685 | $148,100 | $1,397 |
| 26 | Missouri | 1.00% | $1,790 | $138,400 | $1,387 |
| 27 | Florida | 1.06% | $1,894 | $159,000 | $1,686 |
| 28 (tie) | Oregon | 1.08% | $1,929 | $237,300 | $2,563 |
| 28 (tie) | Washington | 1.08% | $1,931 | $259,500 | $2,805 |
| 30 | Maryland | 1.10% | $1,956 | $286,900 | $3,142 |
| 31 | North Dakota | 1.12% | $2,000 | $153,800 | $1,722 |
| 32 (tie) | Alaska | 1.18% | $2,112 | $250,000 | $2,956 |
| 32 (tie) | Minnesota | 1.18% | $2,110 | $186,200 | $2,200 |
| 34 | Massachusetts | 1.20% | $2,139 | $333,100 | $3,989 |
| 35 | Maine | 1.30% | $2,321 | $173,800 | $2,259 |
| 36 | South Dakota | 1.34% | $2,389 | $140,500 | $1,879 |
| 37 | Kansas | 1.40% | $2,502 | $132,000 | $1,849 |
| 38 | Iowa | 1.48% | $2,649 | $129,200 | $1,916 |
| 39 | Pennsylvania | 1.53% | $2,725 | $166,000 | $2,533 |
| 40 | Ohio | 1.56% | $2,794 | $129,900 | $2,032 |
| 41 | New York | 1.62% | $2,899 | $283,400 | $4,600 |
| 42 | Rhode Island | 1.63% | $2,915 | $238,000 | $3,884 |
| 43 | Vermont | 1.74% | $3,116 | $217,500 | $3,795 |
| 44 | Michigan | 1.78% | $3,172 | $122,400 | $2,174 |
| 45 | Nebraska | 1.85% | $3,308 | $133,200 | $2,467 |
| 46 | Texas | 1.90% | $3,386 | $136,000 | $2,578 |
| 47 | Wisconsin | 1.96% | $3,499 | $165,800 | $3,248 |
| 48 | Connecticut | 1.97% | $3,517 | $270,500 | $5,327 |
| 49 | New Hampshire | 2.15% | $3,838 | $237,300 | $5,100 |
| 50 | Illinois | 2.30% | $4,105 | $173,800 | $3,995 |
| 51 | New Jersey | 2.35% | $4,189 | $315,900 | $7,410 |
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