Log in
Free Trial
karina 
8 views 
0
If you are looking for a U.S. state with no property tax, the short answer is simple: There is no state in the United States that completely eliminates property tax.
Every state authorizes local governments to collect property taxes to fund essential public services such as schools, police departments, fire protection, road maintenance, libraries, and local infrastructure.
However, some states have very low effective property tax rates, while others offer generous exemptions that significantly reduce what eligible homeowners pay.
In this guide, you will learn:
- Whether any state has no property tax
- Which states have the lowest property tax rates
- Which states have the highest property taxes
- How property tax works
- Ways to reduce your property tax bill
Key Takeaways
- No U.S. state is completely free from property tax.
- Property taxes are collected primarily by counties, cities, and municipalities rather than state governments.
- Hawaii has the lowest effective property tax rate in the U.S. at around 0.27%-29%.
- New Jersey and Illinois have the highest effective property tax rates, both close to 2%.
- Seniors, veterans, disabled homeowners, and owner-occupied homes often qualify for property tax exemptions.
Why Do States Charge Property Tax?
Property tax isn’t optional for state and local governments. It funds the services residents use every day. According to the Tax Foundation, property taxes make up roughly 28.9% of all state and local tax revenue, and over 70% of local tax revenue specifically. Cut it out entirely, and a state would need to replace that money with much higher sales or income taxes instead.
Some states, like Florida, have floated the idea of eliminating certain property taxes. As of this writing, none has actually done it statewide.
States With the Lowest Property Tax Rates in USA
As per ATTOM Data Solutions’ 2026 property tax survey, cited by Kiplinger, these states consistently rank among those with the lowest effective property tax rates in the country:
| Rank | State | Effective Property Tax Rate |
| 1 | Hawaii | ~0.27% to 0.29% |
| 2 | Alabama | ~0.37% to 0.41% |
| 3 | Arizona | ~0.42% to 0.43% |
| 4 | Idaho | ~0.43% |
| 5 | Nevada | ~0.47%, varies by county |
Rankings for states beyond the top two shift slightly depending on the data source and year, since Arizona, Colorado, South Carolina, and Nevada often cluster within a few hundredths of a percentage point of each other. Hawaii and Alabama, however, consistently hold the #1 and #2 spots across nearly every major source, including ATTOM, SmartAsset, and the Tax Foundation.
A low rate doesn’t always mean a low bill. Hawaii’s rate is the lowest in the country, but its median home value tops $875,000 to $976,000 depending on the source, so many homeowners there still pay $2,000 to $2,400 a year. Compare rates against your actual local home values before assuming a state is “cheap.”
States With the Highest Property Tax Rates
Sources vary somewhat on exact figures, but New Jersey, Illinois, and Connecticut consistently rank among the three highest-taxed states in the country. As per the Tax Foundation and U.S. Census Bureau data cited across multiple 2026 rankings:
| Rank | State | Effective Property Tax Rate |
| 1 | New Jersey | ~1.9% to 2.2% |
| 2 | Illinois | ~1.8% to 2.1% |
| 3 | Connecticut | ~1.6% to 1.9% |
New Jersey and Illinois frequently trade the #1 and #2 spots depending on the data year and methodology, but both are consistently the two highest-taxed states in the country. New Jersey’s typical annual property tax bill exceeds $9,000, largely because of high home values layered on top of an already-high rate.
Also Read: What is a Lease Agreement?
How Property Tax Works
Understanding how property tax is calculated can help you estimate your annual tax bill and identify opportunities to reduce it.
In most states, your property tax is based on three key factors:
- Your property’s assessed value
- Your local property tax rate (often called the mill rate)
- Any exemptions or tax credits you qualify for
For example, if your home is assessed at $300,000 and your local tax rate is 1.72% (or $17.20 per $1,000 of assessed value), your annual property tax would be $5,160.
Keep in mind that property tax rules vary by state and county. Some jurisdictions reassess property values every year, while others do so less frequently. As a result, your tax bill can change even if the tax rate stays the same.
How Rental and Investment Properties Are Taxed
If you own a rental or investment property, your property tax may differ from that of an owner-occupied home.
In many states, rental and investment properties do not qualify for homeowner benefits, such as Homestead Exemptions or owner-occupancy tax credits. While the tax rate itself may not always be higher, the absence of these exemptions often results in a larger property tax bill compared to a primary residence.
The exact rules vary by state and county, so it is worth checking with your local tax assessor if you own or plan to purchase an investment property.
Also Read: Rent To Own: What It Is, How It Works
Property Tax Relief for Seniors, Veterans, and Disabled Homeowners
Even though no state eliminates property tax entirely, many offer exemptions, freezes, or credits for specific groups:
- Seniors: Many states offer exemptions or assessment freezes starting at age 61 to 65, depending on the state.
- Veterans: Disabled veterans often qualify for partial or full exemptions in most states.
- Disabled homeowners: Similar programs exist for homeowners with qualifying disabilities, regardless of age.
For a full state-by-state breakdown of senior-specific programs, see our guide on which states have no property tax for seniors.
How Can You Lower Your Property Tax Bill?
If you live in a state with higher property taxes, moving is not your only option. Many homeowners are able to reduce their annual tax bill simply by taking advantage of available exemptions or reviewing their property assessment. Here are a few practical steps that may help:
- Apply for any exemptions you qualify for, such as Homestead, senior citizen, veteran, or disability exemptions.
- Review your property’s assessed value to ensure it reflects current market conditions.
- File an appeal if you believe your home has been overvalued.
- Keep track of comparable home sales in your neighborhood to support an appeal if needed.
Frequently Asked Questions
Is there any U.S. state with no property tax?
No. There is no U.S. state that completely eliminates property tax. Every state authorizes local governments to collect property taxes to fund schools, public safety, and other essential services.
What state has the lowest property tax rate?
Hawaii has the lowest effective property tax rate in the United States at approximately 0.27%, although high home values can still result in significant annual tax bills.
Do retirees still have to pay property tax?
Yes. Most retirees still pay property tax, but many states offer exemptions, tax credits, or assessment freezes that can reduce their tax burden.
Can I appeal my property tax bill if I think it’s too high?
Yes. Most counties allow homeowners to appeal their property’s assessed value if they believe it is inaccurate. Check with your local tax assessor for deadlines and filing requirements.
This article is for general informational and educational purposes only and should not be considered legal, financial, or tax advice. Property tax rates, rules, and exemptions vary by state and county and change frequently. Consult your local tax assessor’s office or a qualified tax professional before making financial decisions based on this information.
Author
