Property Taxes by State
Complete guide to property tax rates across all 50 states, how taxes are calculated, exemptions, and strategies to reduce your bill
Key Numbers
National Avg
0.86%
Highest
NJ (2.23%)
Lowest
HI (0.27%)
SALT Cap
$10,000/yr
Property taxes are the primary funding source for local governments, accounting for about 70% of local tax revenue. Rates vary dramatically — from 0.27% in Hawaii to 2.23% in New Jersey. States without an income tax (Texas, New Hampshire) often have higher property taxes to compensate, while states that fund schools at the state level (Hawaii) or rely on tourism/sales tax (Nevada, Florida) tend to have lower rates.
Cost Comparison on a $400,000 Home
| State | Effective Rate | Annual Tax | Monthly Cost |
|---|---|---|---|
| New Jersey | 2.23% | $8,920 | $743 |
| Illinois | 2.07% | $8,280 | $690 |
| Texas | 1.60% | $6,400 | $533 |
| National Average | 0.86% | $3,440 | $287 |
| Florida | 0.76% | $3,040 | $253 |
| Hawaii | 0.27% | $1,080 | $90 |
What Your Property Taxes Fund
| Category | Typical Share |
|---|---|
| K-12 Public Education | 45–55% |
| Police & Fire Services | 15–20% |
| Roads & Infrastructure | 10–15% |
| Parks, Libraries, Other | 15–25% |
Highest & Lowest Tax States
Effective property tax rates are calculated by dividing median taxes paid by median home value, based on U.S. Census Bureau American Community Survey data. A low rate does not always mean a low bill — Hawaii's 0.27% rate still produces a $2,183 median bill due to high home values, while Alabama's 0.38% rate yields just $738.
10 Highest Property Tax States
| Rank | State | Rate | Median Bill | Median Home |
|---|---|---|---|---|
| 1 | New Jersey | 2.23% | $9,541 | $427,600 |
| 2 | Illinois | 2.07% | $5,159 | $249,200 |
| 3 | Connecticut | 1.92% | $6,575 | $342,200 |
| 4 | New Hampshire | 1.89% | $6,505 | $344,200 |
| 5 | Vermont | 1.78% | $5,100 | $286,500 |
| 6 | Texas | 1.60% | $4,247 | $265,400 |
| 7 | Wisconsin | 1.53% | $3,788 | $247,600 |
| 8 | Nebraska | 1.52% | $3,223 | $212,000 |
| 9 | New York | 1.40% | $6,450 | $460,700 |
| 10 | Ohio | 1.38% | $2,688 | $194,800 |
10 Lowest Property Tax States
| Rank | State | Rate | Median Bill | Median Home |
|---|---|---|---|---|
| 51 | Hawaii | 0.27% | $2,183 | $808,200 |
| 50 | Alabama | 0.38% | $738 | $195,100 |
| 49 | Colorado | 0.49% | $2,422 | $494,300 |
| 48 | Nevada | 0.50% | $2,029 | $405,800 |
| 47 | South Carolina | 0.51% | $1,227 | $240,600 |
| 46 | West Virginia | 0.53% | $835 | $157,600 |
| 42 | Louisiana | 0.55% | $1,146 | $208,400 |
| 41 | Wyoming | 0.55% | $1,582 | $287,600 |
| 40 | Arkansas | 0.56% | $1,003 | $179,100 |
| 39 | Utah | 0.57% | $2,538 | $445,300 |
Source: Tax Foundation analysis of U.S. Census Bureau American Community Survey data (2024).
All 50 States Ranked
Complete ranking by effective property tax rate (highest to lowest). Effective rate = median taxes paid ÷ median home value. This is the most useful comparison metric because it accounts for differences in assessment ratios across states.
| Rank | State | Effective Rate |
|---|---|---|
| 1 | New Jersey | 2.23% |
| 2 | Illinois | 2.07% |
| 3 | Connecticut | 1.92% |
| 4 | New Hampshire | 1.89% |
| 5 | Vermont | 1.78% |
| 6 | Texas | 1.60% |
| 7 | Wisconsin | 1.53% |
| 8 | Nebraska | 1.52% |
| 9 | New York | 1.40% |
| 10 | Ohio | 1.38% |
| 11 | Pennsylvania | 1.35% |
| 12 | Iowa | 1.35% |
| 13 | Rhode Island | 1.29% |
| 14 | Michigan | 1.29% |
| 15 | Kansas | 1.26% |
| 16 | South Dakota | 1.17% |
| 17 | Maine | 1.11% |
| 18 | Minnesota | 1.05% |
| 19 | Alaska | 1.04% |
| 20 | Massachusetts | 1.04% |
| 21 | North Dakota | 0.98% |
| 22 | Maryland | 0.96% |
| 23 | Washington | 0.92% |
| 24 | Missouri | 0.88% |
| 25 | Oregon | 0.86% |
| 26 | Oklahoma | 0.85% |
| 27 | North Carolina | 0.80% |
| 28 | Georgia | 0.80% |
| 29 | Kentucky | 0.78% |
| 30 | Indiana | 0.77% |
| 31 | Florida | 0.76% |
| 32 | Montana | 0.74% |
| 33 | Virginia | 0.74% |
| 34 | California | 0.70% |
| 35 | New Mexico | 0.67% |
| 36 | Mississippi | 0.66% |
| 37 | Tennessee | 0.62% |
| 38 | D.C. | 0.58% |
| 39 | Utah | 0.57% |
| 40 | Arkansas | 0.56% |
| 41 | Wyoming | 0.55% |
| 42 | Louisiana | 0.55% |
| 43 | Arizona | 0.54% |
| 44 | Idaho | 0.54% |
| 45 | Delaware | 0.53% |
| 46 | West Virginia | 0.53% |
| 47 | South Carolina | 0.51% |
| 48 | Nevada | 0.50% |
| 49 | Colorado | 0.49% |
| 50 | Alabama | 0.38% |
| 51 | Hawaii | 0.27% |
Source: Tax Foundation analysis of U.S. Census Bureau American Community Survey data (2024). Rates represent effective property tax rates.
How Property Taxes Are Calculated
Property tax = Assessed Value × Mill Rate ÷ 1,000. A home assessed at $300,000 with a mill rate of 25 pays $300,000 × 25 ÷ 1,000 = $7,500/year. Your tax bill typically includes levies from multiple jurisdictions (school district, county, city, fire/library districts), each setting their own mill rate.
Key Terms
| Term | Definition | Example |
|---|---|---|
| Market Value | What the property would sell for on the open market | $400,000 |
| Assessment Ratio | % of market value used for tax purposes (varies 4%–100% by state) | 50% |
| Assessed Value | Market value × assessment ratio | $200,000 |
| Mill Rate | Tax per $1,000 of assessed value (set by each taxing authority) | 25 mills = $25 per $1,000 |
| Effective Rate | Actual taxes paid ÷ market value (best for cross-state comparisons) | 1.25% |
Assessment Caps by State
Eighteen states plus D.C. cap how much assessed value can increase annually, protecting existing homeowners from rapid tax increases. Buying a home typically resets the assessed value to current market value.
| State | Annual Cap | Key Detail |
|---|---|---|
| California (Prop 13) | 2% | Resets to market value on sale |
| Florida (Save Our Homes) | 3% or CPI (lesser) | Homestead only; savings are portable |
| Texas | 10% | Homestead only |
| Michigan | 5% or inflation (lesser) | Resets on sale ("uncapping") |
| New York | 6% | Varies by jurisdiction |
New homeowner alert: In cap states, buying resets the assessed value to market. A new buyer may pay significantly more than a long-time neighbor for an identical home.
Exemptions & Deductions
Most states offer exemptions that reduce your assessed value or tax bill. Eligibility depends on homeownership status, age, disability, military service, and income. You must apply — exemptions are not automatic.
Common Exemption Types
| Exemption | Who Qualifies | Typical Benefit | Notable States |
|---|---|---|---|
| Homestead | Primary residence owners | $25K–$100K off assessed value | FL ($50K), TX ($100K school), GA ($2K) |
| Senior | Age 65+ (income limits may apply) | 10%–100% reduction or freeze | TX (freeze), NJ ($250 credit), FL (+$50K) |
| Veteran | Veterans, especially disabled | $5K–100% exemption | TX (100% disabled), FL ($5K), VA (100% disabled) |
| Disability | Permanently disabled persons | $10K–$50K off assessed value | Most states offer some form |
| Agricultural | Farmland / agricultural use | Assessed at ag value (much lower) | TX, FL, CA, most rural states |
Federal SALT Deduction (2026)
The One Big Beautiful Bill Act (signed July 2025) raised the SALT deduction cap from $10,000 to $40,000. The full deduction phases down for higher incomes.
| Item | 2026 Amount | Notes |
|---|---|---|
| SALT Cap (Single / MFJ) | $40,400 | Includes property + state income/sales tax |
| SALT Cap (MFS) | $20,200 | Married filing separately |
| MAGI Phasedown Starts | $505,000 | Cap reduces by 30% of excess MAGI; floor of $10,000 |
| Standard Deduction (Single) | $16,100 | Must exceed to benefit from itemizing |
| Standard Deduction (MFJ) | $32,200 | ~90% of taxpayers take the standard deduction |
Itemizing threshold: The SALT deduction only helps if your total itemized deductions (SALT + mortgage interest + charitable + medical) exceed the standard deduction for your filing status.
Reducing Your Property Tax Bill
Studies suggest 30–40% of properties are over-assessed. Appealing is free in most jurisdictions and the majority of appeals result in some reduction.
| Strategy | How It Helps | Potential Savings |
|---|---|---|
| Appeal assessment | Correct errors in sq ft, condition, or comps; use recent appraisal or sale price | 10–25% reduction |
| File for homestead exemption | Reduces assessed value on primary residence (free to file) | $500–$3,000/yr |
| Claim all eligible exemptions | Senior, veteran, disability, and agricultural exemptions stack in some states | $250–$5,000+/yr |
| Choose location strategically | Rates vary by county, school district, and municipality within the same metro | $1,000–$3,500/yr |
| Timing in cap states | In FL, file homestead ASAP for Save Our Homes; in CA, Prop 13 locks in purchase price | Compounds over time |
| Be strategic about improvements | Permitted additions trigger reassessments; cosmetic updates generally do not | Avoids tax increases |
Reassessment Triggers
Usually Triggers Reassessment
Room additions, finished basements, new pools, major renovations with permits, ADUs or guest houses, and most work requiring a building permit.
Usually Does Not Trigger
Like-for-like replacements (roof, HVAC), cosmetic updates (paint, flooring), landscaping, minor repairs, and some energy efficiency upgrades.
Warning: Never provide false information on exemption applications or attempt to hide permitted improvements. Tax fraud carries penalties including fines, back taxes with interest, and potential criminal charges.
Sources
- 1.Tax Foundation — Property Taxes by State & County (2024 Data)
- 2.U.S. Census Bureau — American Community Survey (Property Tax Data Tables)
- 3.IRS — Revenue Procedure 2025-32 (Tax Year 2026 Inflation Adjustments)
- 4.IRS — Topic No. 503: Deductible Taxes (SALT Deduction)
- 5.Lincoln Institute of Land Policy — Significant Features of the Property Tax
- 6.Consumer Financial Protection Bureau — Reduce Your Property Tax Bill
This content is for educational and informational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for guidance tailored to your situation.