Property Tax Trends by State

How much are you paying in property taxes?

Property taxes account for nearly 70 percent of local tax collections in the United States. The average national property tax bill for a single-family home in the U.S. increased by 4.1 percent in 2023. Property tax values for single-family homes have increased by around 24 percent from 2019 to 2023.

These numbers highlight the financial challenge for new homeowners. The World Population Review reports that an average household in the U.S. pays about $2,459 in property taxes annually.

Property taxes are typically levied locally, which is why they vary across the 50 states (and also across cities within one state). For example, in Alabama, median property taxes range from below $222 to $1,282, with average property tax bills at around $485. Similarly, median property taxes in Virginia range from $473 to $10,000, with average tax bills of approximately $1,893.

As of 2023, New Jersey had the highest effective property tax at 2.23 percent, followed by Illinois at 2.08 percent and Connecticut at 1.79 percent. Among the lowest property tax rate states, Hawaii stands at 0.32 percent, followed by Alabama at 0.40 percent, Colorado at 0.55%, Louisiana at 0.56 percent, Wyoming at 0.56 percent, South Carolina at 0.57%, Utah at 0.57 percent, West Virginia at 0.57 percent, and Nevada at 0.59 percent.

If we analyze at the county level, Salem County in New Jersey has the highest property tax rate in the country at 2.34 percent, followed by Monroe County in New York at 2.314 percent. Counties in Illinois also have high property tax rates. DeKalb County in Alabama has the lowest property tax rate at 0.157%. Other counties in Alabama and Hawaii also have lower rates.

At the city level, Trenton, New Jersey, has the highest property tax rate of any major urban center in the United States, sitting at 2.65 percent. On the other hand, Montgomery, Alabama, has the lowest tax rate of any city in the U.S. at 0.277 percent.

If you are looking for states with the lowest property taxes, you can focus on Hawaii, Arizona, Alabama, Delaware, Tennessee, Idaho, Utah, Nevada, Colorado, and West Virginia. Suppose you want to know which states to avoid because of high property taxes. In that case, you can watch out for New Jersey, Illinois, Connecticut, New York, Nebraska, Ohio, Pennsylvania, Vermont, Kansas and New Hampshire.

As of 2024, there are no states in the U.S. without property taxes, but a large portion of Alaska does not have to pay because of the state’s sparse population.

What Influences Property Tax Rates?

Property taxes are affected by factors such as the value of the property, local government spending, and state and local tax laws and policies.

In recent years, there have been various changes to property taxes across the U.S. as local governments suffer from higher inflation and lower revenues.

For example, states like Nebraska and Wyoming have actively worked towards reducing the property tax burden. Nebraska attempted to cut property taxes by nearly 40 percent, and while it could not do so, the attempt indicates the state’s direction toward tax reform. Wyoming has taken more specific steps by capping annual property tax increases and offering exemptions to long-term homeowners.

Indiana and Colorado have taken different approaches. Indiana has implemented a temporary increase in the homestead supplemental deduction, while Colorado has pursued a direct reduction in property valuations.

The variation across the country is quite obvious. For example, NYC property taxes and other states in the Northeast are much higher than those in the Midwest and South.

There are certain exemptions to property taxes for active members of the military and veterans, senior citizens, widows and widowers, and disabled homeowners. Similarly, there are exemptions based on property type. For example, homestead exemption, exemptions for religious and non-profit organizations, property used for agricultural purposes, and government

Budgeting for Property Taxes

Recent studies have highlighted that property taxes, as well as homeowners insurance, are eating up a greater share of households’ monthly costs. For households struggling with higher living costs and sky-high mortgage rates, a larger tax bill can be another headache to endure. That said, it is vital to calculate your month-to-month expenses to determine your household budget.

Here is a Breakdown of Property Tax Rates in States Across the Country

Property tax rates for states, arranged from lowest to highest, include Delaware at 0.61%, DC at 0.62%, Arizona at 0.63%, Arkansas at 0.64%, Idaho at 0.67%, Mississippi at 0.67%, New Mexico at 0.67%, Tennessee at 0.67%, Montana at 0.74%, California at 0.75%, North Carolina at 0.82%, Kentucky at 0.83%, Indiana at 0.84%, Virginia at 0.87%, Washington at 0.87%, Oklahoma at 0.89%, Florida at 0.91%, Georgia at 0.92%, Oregon at 0.93%, North Dakota at 0.98%, Missouri at 1.01%, Maryland at 1.05%, Minnesota at 1.11%, Massachusetts at 1.14%, South Dakota at 1.17%, Maine at 1.24%, Kansas at 1.34%, Michigan at 1.38%, New York at 1.40%, Rhode Island at 1.40%, Pennsylvania at 1.49%, Iowa at 1.52%, Ohio at 1.59%, Wisconsin at 1.61%, Nebraska at 1.63%, Texas at 1.68%, Vermont at 1.83%, and New Hampshire at 1.93%.