What States Have the Highest and Lowest Property Taxes?

Property taxes are an essential source of revenue for local governments in the United States. They are levied on the value of real estate owned by individuals, businesses, and other entities, and are used to fund public services like schools, roads, and emergency services.

In this post, we will provide an overview of US property taxes, including how they are calculated, who is responsible for paying them, and how they are used to fund local services. Plus, we highlight the states with the highest and lowest property taxes in the country.

Calculation of property taxes

Property taxes are calculated based on the assessed value of a property. The assessed value is determined by a local assessor, who is responsible for appraising the value of all properties in the jurisdiction. The assessor takes into account a variety of factors, including the property's size, location, age, and condition, as well as recent sales of similar properties in the area.

Once the assessed value is determined, the local government sets a tax rate, which is typically expressed as a percentage of the assessed value. For example, if the assessed value of a property is $100,000 and the tax rate is 1%, the property owner would owe $1,000 in property taxes.

Who pays property taxes?

In most cases, property taxes are paid by the owner of the property. However, in some instances, the tax burden may be shared by multiple parties, such as when a property is leased to a tenant. In these cases, the property owner may pass on a portion of the tax cost to the tenant through rent payments.

In addition, some states have programs in place to help low-income homeowners pay their property taxes. These programs may provide exemptions, deferrals, or other forms of assistance to eligible homeowners.

Use of property tax revenue

Property tax revenue is used to fund a variety of local services, including:

• Schools: Property taxes are a significant source of funding for public schools in most states. The revenue is used to pay for teacher salaries, textbooks, classroom supplies, and other educational expenses.

• Public Safety: Property taxes help fund police and fire departments, emergency medical services, and other public safety services.

• Roads and Infrastructure: Property tax revenue is used to maintain and repair local roads, bridges, and other infrastructure.

• Parks and Recreation: Property taxes help fund local parks, community centers, and other recreational facilities.

Comparing property taxes in different states

Property taxes are levied by state and local governments, and the rates can vary widely depending on where you live. Below, we take a look at the states with the highest and lowest property tax rates in the United States, based on data from the Tax Foundation.

States with the highest property tax rates

• New Jersey: With an average effective property tax rate of 2.44%, New Jersey has the highest property tax rate in the nation. This is largely due to the state's high property values and high population density.
• Illinois: Illinois has an average effective property tax rate of 2.27%, making it the second-highest state for property taxes. Property taxes in Illinois are among the highest in the country, and are a major driver of the state's ongoing financial woes.
• New Hampshire: With an average effective property tax rate of 2.19%, New Hampshire has the third-highest property tax rate in the United States. The state's relatively low median home value means that property taxes are more affordable for many homeowners.
• Connecticut: Connecticut has an average effective property tax rate of 2.14%, which is the fourth-highest in the nation. The state's high property values and relatively low population density contribute to its high property tax rates.
• Vermont: With an average effective property tax rate of 1.97%, Vermont has the fifth-highest property tax rate in the United States. The state's high property values and relatively small population contribute to its high tax rates.
• Texas: Texas has an average effective property tax rate of 1.83%, which is the sixth-highest in the nation. However, the state's relatively low median home value means that property taxes are more affordable for many homeowners.
• Pennsylvania: Pennsylvania has an average effective property tax rate of 1.68%, which is the seventh-highest in the United States. The state's high property values and large population contribute to its high tax rates.
• New York: With an average effective property tax rate of 1.68%, New York has the eighth-highest property tax rate in the nation. The state's high property values and large population make it one of the most expensive places to own property in the United States.
• Ohio: Ohio has an average effective property tax rate of 1.56%, which is the ninth-highest in the country. The state's relatively low median home value means that property taxes are more affordable for many homeowners.
• Rhode Island: Rhode Island has an average effective property tax rate of 1.53%, which is the tenth-highest in the United States. The state's small size and high property values contribute to its high tax rates.

States with the lowest property tax rates

• Hawaii: With an average effective property tax rate of just 0.28%, Hawaii has the lowest property tax rate in the nation. The state's low property values and relatively small population contribute to its low tax rates.
• Alabama: Alabama has an average effective property tax rate of 0.44%, making it the second-lowest state for property taxes. The state's low property values and relatively low cost of living contribute to its low tax rates.
• Louisiana: Louisiana has an average effective property tax rate of 0.51%, which is the third-lowest in the United States. The state's low property values and relatively low cost of living make it one of the most affordable places to own property in the country.
• Delaware: With an average effective property tax rate of 0.55%, Delaware has the fourth-lowest property tax rate in the nation. The state's low property values and relatively small population contribute to its low tax rates.
• Washington D.C.: Washington D.C. has an average effective property tax rate of 0.57%, making it the fifth-lowest state for property taxes. The district's small size and high property values contribute to its low tax rates.
• West Virginia: West Virginia has an average effective property tax rate of 0.59%, which is the sixth-lowest in the country. The state's low property values and relatively low cost of living contribute to its low tax rates.
• Wyoming: With an average effective property tax rate of 0.61%, Wyoming has the seventh-lowest property tax rate in the United States. The state's low population density and high property values contribute to its low tax rates.
• Arkansas: Arkansas has an average effective property tax rate of 0.63%, making it the eighth-lowest state for property taxes. The state's low property values and relatively low cost of living make it an affordable place to own property.
• Utah: Utah has an average effective property tax rate of 0.66%, which is the ninth-lowest in the nation. The state's low property values and relatively small population contribute to its low tax rates.
• Mississippi: With an average effective property tax rate of 0.68%, Mississippi has the tenth-lowest property tax rate in the United States. The state's low property values and relatively low cost of living make it an affordable place to own property.

Tips for lowering your property tax liability

As a homeowner, it can be frustrating to receive your property tax bill and find that it has increased significantly. However, there are several tips for lowering your property tax liability and easing the burden on your wallet. 

Firstly, it's important to understand how your property is being assessed. If you believe your property has been overvalued, you can file an appeal with your local assessor's office. 

Additionally, you may qualify for exemptions or deductions, such as a homestead exemption, veteran's exemption, or a senior citizen discount, depending where you live. It's also a good idea to keep track of any improvements or renovations made to your property, as these can increase its value and therefore your tax liability. 

Lastly, pay your taxes on time to avoid any penalties or interest fees. By following these tips, you can reduce your property tax liability and keep more money in your pocket.

Examples of property tax exemptions

Property tax exemptions are typically designed to provide tax relief to certain types of property owners or properties that serve a specific purpose. Here are some examples of property tax exemptions:

• Homestead exemption: This is one of the most common property tax exemptions and provides a tax break to homeowners who use their property as their primary residence. The exemption typically reduces the assessed value of the property, which in turn lowers the amount of property taxes owed.
• Agricultural exemption: This exemption is designed to provide tax relief to landowners who use their property for farming or ranching. The exemption can reduce the assessed value of the land, as well as any buildings or structures used for agricultural purposes.
• Non-profit organization exemption: Non-profit organizations, such as religious institutions, schools, and charities, may be eligible for a property tax exemption. This exemption can apply to the organization's property, including buildings and land, as long as the property is used for the organization's tax-exempt purpose.
• Disability exemption: Some states offer property tax exemptions to individuals with disabilities. The exemption can vary by state but is typically designed to provide tax relief to individuals who own a home and have a disability that makes it difficult to pay property taxes.
• Historical property exemption: Historical properties, such as landmarks or buildings that are listed on the National Register of Historic Places, may be eligible for a property tax exemption. This exemption is designed to encourage the preservation of historic properties by providing tax relief to property owners who maintain and restore these structures.
• Energy efficiency exemption: Some states offer property tax exemptions to homeowners who install energy-efficient features, such as solar panels or geothermal systems, on their property. The exemption is designed to incentivize homeowners to invest in renewable energy and reduce their energy consumption.

Are there states with no property taxes?

There are no states in the United States that have completely abolished property taxes. All states have some form of property tax, although the rates and methods of assessment can vary widely. Some states have relatively low property tax rates, while others have some of the highest rates in the country.

It is important to note that while some states may not have a state-level property tax, local governments such as cities, counties, and school districts may still levy their own property taxes to fund local services and infrastructure. 

Property taxes and senior citizens 

While no state completely exempts senior citizens from property taxes, some states do offer property tax relief programs or exemptions for senior citizens. 

Here is a list of states that have property tax relief programs for senior citizens:

• Alaska: Alaska has a program called the Senior Citizen Property Tax Exemption, which allows seniors who are 65 years of age or older to exempt up to $150,000 of the assessed value of their primary residence from property taxes.
• Arizona: Arizona has a program called the Property Tax Refund Program, which provides property tax refunds to low-income seniors who are 65 years of age or older, or who have a disability.
• California: California has a program called the Property Tax Postponement Program, which allows seniors who are 62 years of age or older, or who have a disability, to defer payment of property taxes until they sell their home or pass away.
• Florida: Florida has a program called the Homestead Exemption, which provides a property tax exemption for seniors who are 65 years of age or older and meet certain income and residency requirements.
• Georgia: Georgia has a program called the Senior School Tax Exemption, which provides a property tax exemption for seniors who are 65 years of age or older and meet certain income requirements.
• Illinois: Illinois has a program called the Senior Citizens Assessment Freeze, which freezes the assessed value of a senior's primary residence, thereby limiting increases in property taxes.
• Maine: Maine has a program called the Property Tax Fairness Credit, which provides a property tax credit for seniors who are 62 years of age or older and meet certain income requirements.
• Massachusetts: Massachusetts has a program called the Circuit Breaker Tax Credit, which provides a property tax credit for seniors who are 65 years of age or older and meet certain income requirements.
• Michigan: Michigan has a program called the Homestead Property Tax Credit, which provides a property tax credit for seniors who are 65 years of age or older and meet certain income requirements.
• Texas: Texas has a program called the Senior Property Tax Exemption, which provides a property tax exemption for seniors who are 65 years of age or older and meet certain income requirements.