Thinking About Moving? These States Have the Lowest Property Taxes

Look at property taxes by state if you're considering buying.

Depending on where you live, you can escape taxes like income tax and sales tax in the U.S. Property taxes, however, are not the same. And no matter where you settle down, you’ve got to cough up some amount come tax season.

That being said, you can minimize property taxes’ effect on your finances. Property tax rates vary significantly across the U.S., not just state-by-state, but county-by-county within states. In all calculations of property tax, the amount comes down to a percentage of your home’s assessed value.

Keep reading to see how your state’s property taxes measure up against the cheapest rates in the U.S.

Best States for Property Taxes

Honolulu, Hawaii.

GOBankingRates conducted a study to determine which states had the lowest property taxes. The study was based on two principal factors: the average effective state property tax rate and the median amount paid annually in property taxes. States were given a score and then ranked in descending order, with the No. 1 state having the lowest property taxes.

Make Your Money Work

The top seven states with the lowest property taxes are as follows:

  1. Alabama
  2. Louisiana
  3. Hawaii
  4. West Virginia
  5. South Carolina
  6. Arkansas
  7. Delaware

Check Out: The Most (and Least) Tax-Friendly Major Cities in America

Low property taxes are great when your focus is saving money. However, property taxes are also a crucial source of revenue for localities and state governments. They’re responsible for funding public schools and the quality of education received.

7 States With the Lowest Property Taxes

Read on to get more details about the states with the lowest property taxes.

7. Delaware

Average state property tax rate: 0.529% of assessed home value

Median real estate taxes paid: $1,274

Delaware is a prime state to get into now if you’re buying a home. With the fourth-lowest state property tax, homeowners won’t pay much. On a related note, in a recent study, Delaware ranked second in the U.S. for the state where home values are appreciating the most.

6. Arkansas

Average state property tax rate: 0.619% of assessed home value

Median real estate taxes paid: $721

Low tax rates and low home values make Arkansas a very affordable state in terms of property taxes. Across the state, county rates are all below 1 percent. The highest tops out at just 0.80 percent in Pulaski County, and the lowest rate is 0.39 percent in Stone County.

Make Your Money Work

Understand: 6 Things Every Homeowner Should Know About Property Taxes

5. South Carolina

Average state property tax rate: 0.574% of assessed home value

Median real estate taxes paid: $821

South Carolina has the sixth-lowest average state property tax rate at 0.574 percent. Based on Zillow’s median home value, $159,100 as of June 2018, you’d pay about $913 annually in taxes. At these rates, you could by a second house in Hilton Head, S.C., ranked the best place in the state to own a vacation home.

4. West Virginia

Average state property tax rate: 0.589% of assessed home value

Median real estate taxes paid: $629

West Virginia is rapidly rising as a state for prospective homeowners. The average state tax rate is seventh lowest nationally, and cheap home prices keep real estate taxes low, at just $629 a year. It’s no surprise that West Virginia is the No. 2 best state for first-time homebuyers.

3. Hawaii

Average state property tax rate: 0.278% of assessed home value

Median real estate taxes paid: $1,459

Hawaii boasts the lowest average effective property tax rate in the whole study at a mere 0.278 percent. Based on a median home value of $615,700, however, you’ll have to pay about $1,712 in property taxes, which is close to what people pay in Florida and North Dakota, where tax rates exceed 1 percent.

Make Your Money Work

2. Louisiana

Average state property tax rate: 0.479% of assessed home value

Median real estate taxes paid: $750

The U.S. South was heavily represented in the top 10 states, especially the Deep South. Louisiana has the third-lowest property tax rate in the U.S., plus affordable homes to keep annual taxes to a minimum. These factors and others help make it one of the best states to buy your first home.

1. Alabama

Average state property tax rate: 0.435% of assessed home value

Median real estate taxes paid: $550

Boasting the least amount paid in real estate taxes and the second-lowest average property tax rate, Alabama took first place fairly easily. Alabama’s median home value, $126,800, is the fifth lowest, which makes for very cheap property taxes, and contributes a more affordable cost of living than most states in the U.S.

Trending Now: From Alabama to Wyoming — The Cost of Living Across America

See the full rankings of all the states:

State Property Taxes
Rank State State Effective Property Tax Rate Median Real Estate Taxes Paid
1 Alabama 0.435% $550
2 Louisiana 0.479% $750
3 Hawaii 0.278% $1,459
4 West Virginia 0.589% $629
5 South Carolina 0.574% $821
6 Arkansas 0.619% $721
7 Delaware 0.529% $1,274
8 Wyoming 0.623% $1,223
9 Mississippi 0.784% $841
10 Colorado 0.624% $1,516
11 Tennessee 0.748% $1,088
12 New Mexico 0.724% $1,232
13 Utah 0.688% $1,508
14 Idaho 0.771% $1,276
15 Kentucky 0.837% $1,078
16 Oklahoma 0.868% $1,076
17 Indiana 0.876% $1,100
18 Arizona 0.845% $1,367
19 North Carolina 0.855% $1,345
20 Nevada 0.921% $1,478
21 Montana 0.870% $1,698
22 Georgia 0.957% $1,413
23 Virginia 0.797% $1,973
24 District of Columbia 0.572% $2,811
25 Missouri 1.004% $1,408
26 Florida 1.100% $1,702
27 North Dakota 1.221% $1,729
28 California 0.813% $3,237
29 Minnesota 1.190% $2,234
30 Oregon 1.076% $2,637
31 Washington 1.083% $2,860
32 South Dakota 1.356% $1,943
33 Maine 1.271% $2,329
34 Maryland 1.085% $3,191
35 Iowa 1.470% $1,986
36 Alaska 1.209% $3,048
37 Kansas 1.587% $1,890
38 Ohio 1.553% $2,064
39 Pennsylvania 1.506% $2,603
40 Massachusetts 1.181% $4,132
41 Michigan 1.833% $2,185
42 Nebraska 1.879% $2,506
43 Texas 1.931% $2,654
44 Rhode Island 1.610% $3,929
45 Vermont 1.719% $3,893
46 Wisconsin 1.969% $3,257
47 New York 1.578% $4,738
48 Illinois 2.253% $4,058
49 Connecticut 1.910% $5,443
50 New Hampshire 2.104% $5,241
51 New Jersey 2.293% $7,601
Make Your Money Work

Click through to read more about the tax breaks every first-time homebuyer must know.

More on Taxes

Methodology: GOBankingRates determined the states with lower property taxes based on the following factors: (1) effective state property tax rate, sourced from SmartAsset; (2) real median real estate taxes paid in each state, sourced from the Census Bureau’s 2016 American Community Survey.

Share this article:

About the Author

Andrew DePietro

Andrew DePietro is a finance writer with years of experience covering topics such as taxation, Social Security, entrepreneurship, investing, real estate and housing markets. His work has appeared on MSN, Yahoo Finance, Fortune, Forbes, CBS and U.S. News. Before writing for GOBankingRates, Andrew worked as a research assistant and graduated from the University of Pennsylvania with a degree in History.

Read More