Lowest Property Tax States
What state has the cheapest property tax? Alabama has the lowest average annual property taxes at $904.72, which is 0.41% of its average home value of $220,663.56. Louisiana boasts a low effective property tax rate. The state’s average effective property tax rate is 0.80%, which is lower than the U.S. average (0.99%).
Wyoming has both low sales taxes and property taxes. The state sales tax rate in Wyoming is a modest 4%. The median annual tax payment in Hawaii is $1,715, which can be attributed to the fact that the median home value is the highest in the U.S. at $615,300.
Wyoming rounds out the list of 10 states with the lowest property taxes with a 0.55% rate. Homeowners in this state pay $1,452 annually in median real estate taxes.
Effective Property Tax Rates
If you’re curious about how to get the lowest property taxes in America, check the list of the 10 best states for property taxes below. These states include:
- Hawaii
- Effective Property Tax Rate: 0.35
- Hawaii has the lowest effective property tax rate among all states at 0.35% of home value.
The average property tax rate in the United States as a whole is 1.10%. Rates can range from 0.28% in some states to 2.49% in others.
Property taxes can be a high cost for vacation rental owners, so it’s important to explore which states have the lowest rates.
Ranked from lowest to highest, these are the average property tax rates in the U.S. in 2022:
- Hawaii – 0.28%
- Alabama – 0.41%
Tax Considerations for Homeowners and Retirees
The variation in property tax rates across states is influenced by several factors, including state and local government budgets. Additionally, the presence of other taxes, such as income or sales taxes, can influence the level of property taxes in a given state.
Alabama has both a low property tax rate and home prices that are below the median home value in the United States.
States with No Property Tax for Seniors:
- Hawaii
States with the Highest Property Taxes
New Jersey has the highest property tax rate at 2.47%, followed by Illinois, Connecticut, New Hampshire, and Vermont. New York has the highest income tax burden at 4.7% of income or $3,500 per person. No state is without property taxes, although Hawaii has the lowest at 0.31%. The variation in property tax rates across states is due to several factors such as state and local government budgets, revenue sources, and overall tax structures.
Median property tax rates show New Jersey highest at 2.21% of home value in 2020, and Hawaii is lowest at 0.31% of home value.