Eliza Theiss<\/a><\/strong><\/p>\n\tOne of the oldest forms of taxation, property taxes are one of the primary forms of revenue streams for local governments. They’re used to fund public services and programs, such as schools; emergency services (including fire and police departments); infrastructure development and upkeep; parks and recreation; sanitation (including pest control, like mosquito abatement); public works; government employee payrolls; and more.\u00a0<\/p>\n
While property tax rates can vary significantly by state, all states apply them to all properties, as well as land. Additionally, property taxes can also vary within different areas of a state, as well, because local governments may charge differing rates or additional taxes to fund specific programs and services – such as an added county-level tax for capital infrastructure developments or even within certain parts of a larger city to garner additional funds for a specific school district.\u00a0\u00a0<\/p>\n
Consequently, that difference in property tax rates between states can lead to significant differences between homeowners’ tax bills. For example, Alabama’s average effective tax rate stands at 0.38%, while Illinois’ average property tax rate is 2.01%. That means that the owners of a $1 million home taxed at full market value will have a $20,100 property tax bill in Illinois but would only have to pay $3,800 in Alabama. Therefore, it’s essential to be familiar with local tax policies when considering a new location. \u00a0<\/p>\n
\n\t\t\tDetermining Property Taxes\t<\/h2>\n\t
Levied annually, property taxes are calculated by multiplying the assessed value of the property by the effective tax rate applicable in the property’s region – also referred to as an ad valorem tax – as well as taking into account any exemptions or deductions that the owner or property may qualify for.\u00a0<\/p>\n
\n\t\t\tAssessed Value\t<\/h3>\n\t
The assessed value of a property is determined by a government assessor designated by the tax jurisdiction under whose purview the property falls. Generally, the assessed value is determined every one to five years, although some states will only perform assessments in the case of specific events concerning the property, such as a change in ownership. And, while some jurisdictions assess at 100% market value, the assessed value is typically a certain fraction of the property’s market value.\u00a0\u00a0<\/p>\n
The assessed value is determined by a variety of factors, such as recent comparable property sales in the area; the cost to replace the property; potential income the property would produce if rented (taking into account operation costs); and any improvements or damages.\u00a0\u00a0<\/p>\n
The percentage of market value that is assessed for a property’s taxation or tax liability is known as the assessment ratio. This can range from 100% — meaning that the tax jurisdiction assesses a property’s full market value for taxation – to as low as 10%. So, a $1 million home located in a tax jurisdiction with a 20% assessment ratio will have an assessed value of $200,000, which is the amount that it will be taxed for.<\/p>\n
\n\t\t\tEffective Tax Rate\t<\/h3>\n\t
The effective tax rate – also referred to as millage or mill rate – is determined by adding all of the mill levies or millage rates for each tax jurisdiction that the property is located in. For example, a home can fall under the tax jurisdiction of a city, county and school tax district. As a result, that property’s mill levy will be the sum of all three tax jurisdictions’ millage.<\/p>\n
Mill rates are expressed in mills and represent the taxed amount per $1,000. meaning one mill equals one-thousandth of a dollar ($0.001 or 0.1 cents) or a millage rate of 0.001. If a school district has a mill of 30, then that school district’s millage rate will be 0.03, representing $30 of tax for every $1,000 of assessed value and resulting in a tax rate of 3%.<\/p>\n
Millage rates or mills are determined by local governments’ budgetary needs divided by the value of all properties located in their jurisdiction. So, assuming the assessed property value in a specific area is $100 million and the budgetary needs are $10 million for the city, $4 million for the county, and $5 million for the school district, the city’s mill rate will be 0.1 ($10 million\/$100 million), the county’s rate will be 0.04 and the school district’s 0.05, resulting in a total mill rate of 0.19 or 190 mills for a 19% tax rate.<\/p>\n
\n\t\t\tProperty Tax Exemptions\t<\/h3>\n\t
While all states apply taxes to all properties, some individuals and organizations can benefit from partial or full property tax exemptions. Properties owned by the government and religious organizations are fully exempt across the U.S., and most states offer some form of property tax exemption to disabled veterans. Some states – such as Iowa – offer exemptions to all veterans.\u00a0\u00a0<\/p>\n
Other individuals and properties that may benefit from full or partial exemptions include charitable organizations, wildlife habitats and nature conservation areas, urban and historic revitalization developments, low-income households, and individuals with disabilities, among others. Furthermore, full or partial exemptions are also often provided as incentives to businesses, organizations and individuals to boost local and state economies and\/or revitalize specific areas.\u00a0\u00a0<\/p>\n
Essentially, states and local governments have the power to designate tax exemption for individuals and organizations. And, similar to the effective tax rate, property tax exemptions can and do differ significantly by state and potentially within different areas of a state, as well.\u00a0\u00a0<\/p>\n
\n\t\t\t2026 U.S. Property Taxes by State\t<\/h2>\n\t
Property taxes can vary significantly from state to state, leading to a difference of potentially thousands of dollars in a homeowner’s bill for essentially identical properties.<\/p>\n
Therefore, it’s crucial to thoroughly research property taxes at both the state level – to get a general idea of a state’s level of taxation – and a very specific local level for an area you may be considering relocating to.<\/p>\n
Moreover, it must be kept in mind that tax levies are always set by local governments – such as the city, county or school district – and may include surtaxes for special assessment districts that may be as small as a neighborhood or subdivision.<\/p>\n
To provide a clear snapshot of a state’s overall tax burden, we determined each state’s average effective tax rate by dividing the median real estate taxes paid by the median home value, based on data from the U.S. Census Bureau. In simple terms, this shows what percentage of a state’s median home value goes toward property taxes.<\/p>\n
Explore the table below to discover 2026 property taxes ranked by state.<\/p>\n\t