States With the Lowest Property Taxes in 2026

If you are searching for a place to live where property taxes will not dominate your monthly budget, you are not alone. The difference between high-tax and low-tax states can amount to thousands of dollars per year. While no state completely eliminates property taxes, several keep their effective rates remarkably low.

Top 10 States With the Lowest Property Taxes

Rankings are based on effective property tax rates — the actual taxes paid as a percentage of home value. This provides the most accurate comparison regardless of how each state assesses properties.

1. Hawaii — Effective Rate: 0.29%

Hawaii has the lowest effective rate in the nation. The state funds government through its general excise tax, tourism revenue, and relatively high income taxes. However, with a median home value above $650,000, the median annual bill is still around $1,893.

2. Alabama — Effective Rate: 0.39%

Alabama is one of the most affordable states by any measure — a 0.39% rate combined with a median home value around $147,000 produces a median annual bill of just $572. The state assesses owner-occupied homes at only 10% of appraised value. Baldwin County on the Gulf Coast offers low taxes with desirable coastal living.

3. Colorado — Effective Rate: 0.49%

Colorado keeps rates low through TABOR (Taxpayer's Bill of Rights), which limits property tax revenue collection. Despite rising home values in Denver and Boulder, the effective rate stays below 0.50%. El Paso County (Colorado Springs) is one of the more affordable metro areas.

4. Louisiana — Effective Rate: 0.51%

Louisiana offers a generous homestead exemption shielding the first $75,000 of assessed value from parish taxes. The median annual bill is around $832. Even the New Orleans metro remains well below the national average.

5. South Carolina — Effective Rate: 0.55%

South Carolina assesses owner-occupied homes at just 4% of fair market value (vs. 6% for second homes). With a median bill of $924, it is attractive to retirees and first-time buyers. Greenville County is popular for its growing job market.

6. West Virginia — Effective Rate: 0.57%

West Virginia benefits from some of the lowest home values in the country (median ~$128,000), producing a median annual bill of approximately $730. Homestead exemptions are available for seniors.

7. Wyoming — Effective Rate: 0.57%

Wyoming uses energy industry revenue (coal, oil, natural gas) to reduce dependence on property taxes. Combined with no state income tax, it is doubly attractive for minimizing overall tax burden.

8. Utah — Effective Rate: 0.58%

Utah offers a primary residential exemption that reduces taxable value by 45%, keeping effective rates low despite rapid growth in the Salt Lake City corridor. Salt Lake County rates are close to the statewide average.

9. Arkansas — Effective Rate: 0.61%

Arkansas assesses residential property at 20% of appraised value, with a homestead credit of up to $375/yr. Benton County in Northwest Arkansas combines low taxes with a strong economy anchored by major employers.

10. Arizona — Effective Rate: 0.62%

Arizona limits tax increases through its Truth in Taxation law, requiring public hearings before raising levies. Warm weather, a growing job market, and low property taxes continue to drive strong in-migration.

Trade-offs of Living in Low Property Tax States

Property taxes are the primary funding mechanism for local schools, fire departments, and road maintenance. States with lower property tax revenue often compensate in other ways:

• Higher sales taxes: Louisiana and Arkansas have combined rates exceeding 9% in many areas.
• Higher income taxes: Hawaii has a top marginal rate of 11%, one of the highest in the nation.
• Lower public service spending: Alabama and West Virginia rank toward the bottom in per-pupil education spending.
• Higher fees: Some states offset low property taxes with higher vehicle registration fees, utility taxes, or impact fees.

Best Counties for Low Property Taxes

Within each state, rates vary significantly by county. Here are standout counties that combine low state rates with favorable local conditions:

• Honolulu County, Hawaii — Statewide low rate with urban amenities
• Baldwin County, Alabama — Gulf Coast location with a growing population
• El Paso County, Colorado — Affordable Colorado Springs metro
• Greenville County, South Carolina — Rapidly growing economy
• Salt Lake County, Utah — Jobs and recreation with a low effective rate
• Benton County, Arkansas — Northwest Arkansas economic hub