Property Tax Rates by State: Complete 2026 Guide

Property taxes are one of the largest recurring expenses for homeowners in the United States, yet the amount you pay varies dramatically depending on where you live. A home valued at $300,000 could cost you over $6,600 per year in New Jersey but only around $1,050 in Hawaii. Understanding how property tax rates differ by state is critical whether you are buying a new home, relocating for work, or simply trying to plan your household budget.

In this guide, we break down effective property tax rates for all 50 states, explain how those rates are calculated, and highlight the regional patterns that drive the biggest differences. We also provide tables comparing the highest and lowest tax states, along with practical advice for homebuyers navigating this complex landscape.

How Effective Property Tax Rates Are Calculated

When people talk about property tax rates, they are almost always referring to the effective tax rate. This is different from the nominal or millage rate that your county assessor publishes. The effective tax rate is calculated by dividing the total property taxes paid in an area by the total assessed home value:

Effective Tax Rate = (Total Taxes Paid / Total Assessed Home Value) x 100

This metric is useful because it accounts for differences in how states assess property values. Some states assess homes at full market value while others assess at a fraction, sometimes as low as 10 percent of market value. By focusing on the effective rate, you get an apples-to-apples comparison of the actual tax burden homeowners face.

For example, Texas has no state income tax but relies heavily on property taxes to fund local services, resulting in a higher effective rate. Meanwhile, states like California cap assessment increases through legislation like Proposition 13, which can keep effective rates lower than they might otherwise be.

Our data comes from U.S. Census Bureau American Community Survey estimates and covers owner-occupied housing units across more than 3,000 counties nationwide. You can explore county-level data on each of our state pages or use our property tax calculator to estimate your own bill.

States With the Highest Property Tax Rates

The states with the highest effective property tax rates tend to be concentrated in the Northeast and Upper Midwest. These states often have higher costs of living, strong public school systems funded primarily through property taxes, and older infrastructure that requires ongoing maintenance.

Rank	State	Effective Tax Rate	Median Annual Tax	Median Home Value
1	New Jersey	2.21%	$8,928	$404,100
2	Illinois	2.08%	$4,744	$228,200
3	New Hampshire	1.93%	$6,036	$312,700
4	Connecticut	1.79%	$5,746	$321,100
5	Texas	1.68%	$3,520	$209,500
6	Vermont	1.65%	$4,340	$263,000
7	Wisconsin	1.61%	$3,484	$216,400
8	Nebraska	1.54%	$2,926	$190,000
9	Ohio	1.52%	$2,447	$160,900
10	Iowa	1.50%	$2,372	$158,100

New Jersey has held the top spot for years, driven by high municipal costs, well-funded school districts, and dense suburban development. The median annual property tax bill in New Jersey exceeds $8,900, making it the most expensive state for homeowners in terms of property taxes alone.

Illinois ranks second, largely due to the Chicago metropolitan area where property taxes fund a complex web of overlapping local government bodies, school districts, and special taxing authorities. Cook County homeowners regularly see effective rates above 2.5 percent.

Texas stands out on this list because it is often perceived as a low-tax state. While Texas has no state income tax, it compensates with above-average property tax rates. Cities like Houston, Dallas, and Austin all have effective rates that place a significant burden on homeowners, particularly as home values have risen sharply in recent years.

States With the Lowest Property Tax Rates

On the other end of the spectrum, states with the lowest property tax rates tend to rely more heavily on other revenue sources such as sales taxes, income taxes, or revenue from natural resources like oil and gas. Several of these states are in the South and West.

Rank	State	Effective Tax Rate	Median Annual Tax	Median Home Value
1	Hawaii	0.29%	$1,893	$652,800
2	Alabama	0.39%	$572	$146,700
3	Colorado	0.49%	$1,756	$358,300
4	Louisiana	0.51%	$832	$163,100
5	South Carolina	0.55%	$924	$168,000

Hawaii consistently has the lowest effective property tax rate in the country at around 0.29 percent. However, because home values in Hawaii are exceptionally high, the median annual tax bill is still nearly $1,900. This is an important reminder that a low tax rate does not always mean a low tax bill.

Alabama offers both a low rate and a low median bill, making it one of the most affordable states for property taxes in absolute terms. The state uses a classification system that taxes owner-occupied homes at only 10 percent of their appraised value.

For a deeper dive into the most affordable states, see our full article on states with the lowest property taxes.

Regional Patterns in Property Tax Rates

Property tax rates in the United States follow clear regional patterns that reflect historical, political, and economic differences between parts of the country.

Northeast

The Northeast generally has the highest property tax rates in the country. States like New Jersey, Connecticut, New Hampshire, and New York all have effective rates well above the national average. This is driven by high home values, strong public school funding, and the absence of other major revenue sources in some states. New Hampshire, for example, has no state income tax and no sales tax, so property taxes carry a disproportionate share of the funding burden.

Midwest

The Upper Midwest also tends toward higher rates. Illinois, Wisconsin, Nebraska, and Iowa all appear among the top 10 highest-rate states. Many Midwestern counties rely on agricultural property valuations, and the tension between farmland assessments and residential assessments can create complex tax dynamics.

South

Southern states generally have lower property tax rates. Alabama, Louisiana, South Carolina, West Virginia, and Arkansas all have effective rates below 0.65 percent. These states tend to fund government through sales taxes and, in some cases, higher income tax rates instead.

West

Western states are more varied. Hawaii and Colorado have very low rates, while Oregon and Washington fall closer to the national average. California is a unique case: Proposition 13 limits assessment increases to 2 percent per year, so long-time homeowners often pay far less than recent buyers with similar homes.

How Property Tax Rates Affect Homebuyers

Property taxes have a direct impact on your monthly housing costs. When you apply for a mortgage, lenders include estimated property taxes in your debt-to-income ratio, which can affect how much home you qualify to buy. In high-tax states, this can reduce your purchasing power by tens of thousands of dollars.

Consider a practical example: A buyer looking at a $350,000 home in New Jersey would face an estimated annual property tax bill of around $7,735 (at a 2.21 percent rate), which adds roughly $645 per month to their housing costs. The same home in Alabama would have an estimated annual bill of just $1,365, or about $114 per month. That difference of over $530 per month could be the margin that determines whether a buyer qualifies for their mortgage.

Beyond the mortgage itself, property taxes affect long-term wealth building. Higher taxes mean less money available for savings, investments, or home improvements. This is why many retirees on fixed incomes relocate to lower-tax states, and why some states offer homestead exemptions that reduce the tax burden for primary residences.

Use our property tax calculator to estimate what you would pay in any county across the country before making a purchasing decision.

Frequently Asked Questions

Which state has the highest property tax rate?

New Jersey has the highest effective property tax rate in the country at approximately 2.21 percent. The median annual property tax bill in New Jersey exceeds $8,900.

Which state has the lowest property tax rate?

Hawaii has the lowest effective property tax rate at approximately 0.29 percent. However, high home values mean the median bill is still around $1,900 per year.

Are there any states with no property tax?

No state completely eliminates property taxes. All 50 states levy property taxes at the local level. However, some states offer significant exemptions for certain groups, such as seniors, veterans, and disabled homeowners.

How often do property tax rates change?

Effective tax rates can change every year because they depend on both the tax levies set by local governments and the assessed values of properties. Reassessment cycles vary by state and county, ranging from annual reassessments to cycles of up to 10 years.

Does a lower property tax rate mean I will pay less?

Not necessarily. Your total property tax bill depends on both the rate and the assessed value of your home. A state with a low rate but high home values (like Hawaii) may still result in a sizable tax bill. Conversely, a state with a moderate rate and low home values may produce a very small annual bill.

Where can I look up rates for a specific county?

You can explore county-level property tax data on any of our state pages. For example, visit our Texas page to see rates for all Texas counties, or use our property tax calculator for a personalized estimate.