Property Tax Rates by State: Complete Guide

Property taxes are one of the largest components of your monthly mortgage payment, yet many home buyers overlook them when budgeting. Depending on where you live, property taxes can range from less than $1,000 per year to over $10,000.

Property Tax Rates by State (Ranked)

Lowest Property Tax States

Rank State Effective Rate Annual Tax on $300K Home
1 Hawaii 0.28% $840
2 Alabama 0.41% $1,230
3 Colorado 0.51% $1,530
4 Louisiana 0.55% $1,650
5 Nevada 0.55% $1,650
6 South Carolina 0.57% $1,710
7 Delaware 0.57% $1,710
8 Utah 0.58% $1,740
9 West Virginia 0.58% $1,740
10 Wyoming 0.61% $1,830

Highest Property Tax States

Rank State Effective Rate Annual Tax on $300K Home
1 New Jersey 2.47% $7,410
2 Illinois 2.23% $6,690
3 New Hampshire 2.18% $6,540
4 Connecticut 2.15% $6,450
5 Vermont 1.90% $5,700
6 Texas 1.80% $5,400
7 Wisconsin 1.76% $5,280
8 Nebraska 1.73% $5,190
9 New York 1.72% $5,160
10 Pennsylvania 1.58% $4,740

How Property Taxes Affect Your Monthly Payment

Property taxes are included in your PITI payment (Principal, Interest, Taxes & Insurance). The difference between a low-tax and high-tax state is dramatic:

On a $400,000 home at 6.5% with 20% down:

State Tax Rate Monthly Tax Monthly PITI
Hawaii 0.28% $93 $2,233
Texas 1.80% $600 $2,740
New Jersey 2.47% $823 $2,963

Living in New Jersey vs. Hawaii adds $730/month ($8,760/year) to your mortgage payment — just from property taxes. That’s the equivalent of borrowing an extra $115,000.

States With No Income Tax But High Property Taxes

Some states that advertise “no income tax” make up for it with higher property taxes:

  • Texas — No income tax, but 1.80% property tax rate
  • New Hampshire — No income tax, but 2.18% property tax rate

Others have both low income tax and low property taxes:

  • Nevada — No income tax, 0.55% property tax
  • Wyoming — No income tax, 0.61% property tax
  • Florida — No income tax, 0.86% property tax

When comparing states for affordability, always look at the total tax picture.

How Property Taxes Are Calculated

Your property tax bill is based on two things:

  1. Assessed value — Your local tax assessor’s estimate of your property’s market value (may differ from purchase price)
  2. Mill rate — The tax rate set by your county, city, school district, and other local taxing authorities

Property taxes fund local services including public schools, fire departments, road maintenance, and parks. This is why rates vary so much between neighborhoods — even within the same state.

How to Reduce Your Property Taxes

1. Check Your Assessment for Errors

Review your property record for incorrect square footage, extra bedrooms, or other errors that inflate your assessed value.

2. Appeal Your Assessment

If comparable homes in your area are assessed lower, you can formally appeal. Many homeowners save hundreds or thousands per year through successful appeals.

3. Apply for Exemptions

Many states offer property tax exemptions for:

  • Homestead exemption — Reduces taxable value for your primary residence
  • Senior citizen exemption — Additional reduction for homeowners over 65
  • Veteran exemption — Discounts for military veterans
  • Disability exemption — Reductions for disabled homeowners

4. Consider Location Within a State

Property tax rates vary by county and municipality. Moving one town over can sometimes reduce your tax bill by 20-30%.

Calculate Your Local Property Tax Impact

Use our state-specific mortgage calculators — each is pre-filled with local tax rates so you can see exactly how property taxes affect your payment in your area. Or enter your own tax amount in our PITI calculator for a custom calculation.

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