Homeowners

These are the States with the Lowest and Highest Property Taxes

There are quite a few pieces to the financial puzzle when you’re buying a home. One that often gets overlooked is property taxes.

However, when you’re factoring the costs of buying a home, it’s important to include property taxes in the affordability equation, according to a new study by personal finance site WalletHub.

“People generally do not directly consider property taxes when they move,” Valrie Chambers, a professor of taxation and accounting at Stetson University in DeLand, Fla., said in a statement. “They generally consider jobs, family, and lifestyles. Lifestyles, in turn, are affected by the overall cost of living.”

Property tax rates vary greatly across the country, with the average homebuyer shelling out $2,969 per year in property taxes, according to the U.S. Census Bureau.

But the tax rates vary greatly from state to state.

“Some states charge no property tax at all,” said WalletHub Analyst Chip Lupo in a statement. “Others charge an arm and a leg.”

Property taxes are levied to fund public schools and a variety of other public services that benefit the community. And they are based on the assessed value, not the market value, of the property.

To help people make a more informed decision when moving and/or buying a home, the WalletHub study ranks the 50 states and the District of Columbia by their respective tax rates, showing which states have lower (and higher) tax rates.

The study is based on U.S. Census Bureau data gathered in January 2025 and may help guide your decision on where to put down roots—or at least make you aware of the total costs of homeownership.

Which states have the highest property taxes?

Not surprisingly, states on the East Coast charged have the highest property taxes. These states also tend to have high home prices.  

In New Jersey, which is ranked as the most expensive state for the amount of property taxes paid, the tax rate is 2.23%. That means that taxes on a $303,400 home, the median value recorded in 2023, add up to about $9,541 a year. (The exact amount will vary based on where you live.)

In Connecticut, which holds the No. 2 spot, that same house would cost $6,575 in property taxes.

Rounding out the top five most expensive states are New Hampshire, where homebuyers pay about $6,505, in New York, it’s $6,450, and in Massachusetts, you’ll pay $5,813.

Which states have the lowest property taxes?

The states with the lowest property taxes are also the states where homes tend to be less expensive. Unsurprisingly, that means the lowest property taxes tend to be clustered in the South.

Alabama’s 0.38% tax rate is one of the least expensive in the country. That means that those with a home valued at $303,400 house will only pay about $738 annually in property taxes. That’s the lowest dollar amount in the nation.

The only state with a lower tax rate was Hawaii, at 0.27%. However, homes are so much more expensive in the state that annual taxes are much higher.

West Virginia comes in second with the lowest annual taxes at $835, followed by Arkansas at $1,003, Louisiana at $1,146, and Mississippi at $1,189.

Although property tax bills are rarely adjusted for inflation, “they have risen substantially in many states, doubling in the past decade,” said Willam F. Shughart, a professor in the department of economics and finance at Utah State University in Logan, Utah, said in a statement.

Homeowners aren’t the only ones affected by property tax rates; landlords take them into account when they set rental rates.

Chambers noted that property taxes “should be taken in context. For example, California and lately Florida are high-cost real estate localities. Florida’s property taxes are much lower, but insurance is much higher, so payments tend to even out.”