Property Taxes by State
One 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.
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.
Consequently, that difference in property tax rates between states can lead to significant differences between homeowners' tax bills. For example, Alabama's median effective tax rate stands at 0.41%, while Illinois' median property tax rate is 2.27%. That means that the owners of a $1 million home taxed at full market value will have a $22,700 property tax bill in Illinois but would only have to pay $4,100 in Alabama. Therefore, it's essential to be familiar with local tax policies when considering a new location.
Determining Property Taxes
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.
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.
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.
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.
Effective Tax Rate
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.
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%.
For example, Connecticut's 2.14% effective tax rate means that owners of a $1 million home will be charged 21.4 mills or $21.4 for every $1,000 assessed value of their homes. In this case, in a jurisdiction where the assessment ratio is 20% of the property's market value, a $1 million home will have a tax assessed value of $200,000 with a yearly property tax bill of $4,280. However, if the assessment ratio is 100%, the tax bill will be $21,400.
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.
Special Assessment Taxes
Local and state governments have the power to influence property tax bills by increasing or decreasing effective tax rates; granting or terminating tax exemptions; modifying the assessment ratio; increasing or decreasing the assessed value; or establishing additional special assessment taxes. Also referred to as a surtax, a special assessment tax is levied on property owners to garner funds for special or additional services and programs, usually in one specific area.
This can be achieved by levying an additional tax for a limited amount of time, such as a surtax charged for a limited number of years to add a new wing to a specific school or increase green spaces and bike lanes in a city. It can also be achieved by creating a special assessment tax district to raise funds for specific services and programs, such as North Carolina's fire tax and fire insurance districts or projects that will serve a specific area. For instance, homeowners in a newly built neighborhood may have a surtax added to their tax bill to fund infrastructure projects that will only benefit residents of that specific subdivision.
Property Tax Exemptions
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.
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.
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.
Property Taxes by State
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. 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. 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.
What's more, a state with low property taxes does not necessarily mean that other forms of taxation — such as income or sales taxes — will also be lower. As such, those decided on a larger home with significant acreage will have to consider the level of financial burden between states with lower property taxes versus those with high levies. So, for an easy overview of a state's general level of taxation, we calculated each state's average effective tax rate by dividing the median real estate taxes paid by the median home value, as reported by the U.S. Census Bureau. Essentially, we defined the average effective tax rate as a percentage of the state median home value.
|States & Territories||Median Home Value||Median Property Taxes Paid ($)||Average Effective Tax Rate (%)||Median Income Per Household|
Map of Property Tax Rates by State
Explore the interactive map below for a quick overview of average effective property taxes by state, including Washington, D.C. and Puerto Rico. Hover over or zoom in on each state for additional stats at a glance.
Note: The average effective tax rates displayed on the map above are expressed as a percentage of home value and were calculated by PropertyShark for each individual state by dividing the median real estate taxes paid by the median home value.
States with the Highest Property Taxes
Considering the varying tax rates across the U.S., homeowners relocating from a state with low property taxes to one that charges high levies may be confronted with an unexpected financial cost. However, it's important to keep in mind that high property taxes do not automatically mean that other taxes — such as sales, income and fuel taxes — will also be high.
For example, Texas currently has the seventh-highest effective property tax rate in the U.S. at 1.8%. And, at 6.25%, it also has one of the highest state sales taxes in the country — which, paired with additional municipal sales taxes, can bring the total sales tax to well above 8% in some areas. However, Texas is also one of only seven states that don't levy personal income tax, thereby offsetting homeowners' higher bills.
Curious to see which states have property taxes that rival — and even surpass — that of Texas? Explore below the top 10 states with the highest property taxes in the U.S., according to the average effective tax rate. Also included are the median state home value, the median real estate taxes paid and the median household income.
|1. New Jersey|
|Effective tax rate:||2.49%|
|State median home value:||$335,600|
|Median real estate taxes paid:||$8,362|
|Median household income:||$82,545|
New Jersey homeowners contend with the highest average effective property tax rate in the U.S. Paired with the seventh-highest state median home value, New Jersey homeowners have the absolute highest median real estate tax bill in the country at more than $8,000. Plus, New Jersey also charges one of the highest sales taxes at 7%, while its graduated income tax ranges from as low as 1.4% to as high as 10.75%.
|Effective tax rate:||2.27%|
|State median home value:||$194,500|
|Median real estate taxes paid:||$4,419|
|Median household income:||$65,886|
Although Illinois has the second-highest property tax rate in the U.S., homeowners face noticeably lower tax bills here than in New Jersey, thanks to the state's significantly lower median home value. However, Illinois homeowners still pay the sixth-highest median property tax bill in the country. Its 6.25% sales tax is also on the heftier side and is joined by a 4.95% state income tax.
|3. New Hampshire|
|Effective tax rate:||2.18%|
|State median home value:||$261,700|
|Median real estate taxes paid:||$5,701|
|Median household income:||$76,768|
Like Illinois, New Hampshire's property tax rate is among the absolute highest in the U.S., but homeowners face lower bills here than in New Jersey, thanks to a significantly lower state median home value. Regardless, New Hampshire homeowners still pay the third-highest property tax bill at $5,701, surpassed only by Connecticut and New Jersey. However, New Hampshire charge no state sales tax, thereby significantly offsetting the cost of living.
|Effective tax rate:||2.14%|
|State median home value:||$275,400|
|Median real estate taxes paid:||$5,898|
|Median household income:||$78,444|
|Effective tax rate:||1.9%|
|State median home value:||$227,700|
|Median real estate taxes paid:||$4,329|
|Median household income:||$61,973|
|Effective tax rate:||1.85%|
|State median home value:||$180,600|
|Median real estate taxes paid:||$3,344|
|Median household income:||$61,747|
|Effective tax rate:||1.8%|
|State median home value:||$172,500|
|Median real estate taxes paid:||$3,099|
|Median household income:||$61,874|
|Effective tax rate:||1.73%|
|State median home value:||$155,800|
|Median real estate taxes paid:||$2,689|
|Median household income:||$61,439|
|9. New York|
|Effective tax rate:||1.72%|
|State median home value:||$313,700|
|Median real estate taxes paid:||$5,407|
|Median household income:||$68,486|
|10. Rhode Island|
|Effective tax rate:||1.63%|
|State median home value:||$261,900|
|Median real estate taxes paid:||$4,272|
|Median household income:||$67,167|
For an easier overview of the differences in tax rates among the states with the highest property taxes, explore our chart below:
States with the Lowest Property Taxes
Some U.S. states (and territories) boast attractively low property tax rates paired with low taxation in other areas, as well. For instance, Louisiana currently has the fifth-lowest property tax rate in the U.S. at 0.55%. And, at 4%, it also has one of the lowest sales taxes in the country, as well, while its state income taxes range between 2% and 6%.
However, it's important to keep in mind that states with low property taxes may levy higher charges in other areas of taxation, such as fuel, income, sales or personal property. As an example, at 0.52%, the Commonwealth of Puerto Rico charges the fourth-lowest property taxes when compared to the 50 states and Washington, D.C. But, it also charges an 11.5% sales and use tax (with a few exceptions, such as general groceries and medication).
Curious which states have lower property taxes than Louisiana? Explore our list below to see the 10 states with the lowest property taxes by their average effective property tax rate. Also included are the median state home value, the median real estate taxes paid and the median household income.
|Effective tax rate:||0.28%|
|State median home value:||$615,300|
|Median real estate taxes paid:||$1,715|
|Median household income:||$81,275|
Hawaii currently has the lowest average effective property tax rate in the U.S. at 0.28%. However, because it also features one of the highest median home values, homeowners' tax bills can still easily surpass that of states with higher rates. Even so, at 4%, the state also has one of the lowest sales tax rates in the country — as states with a thriving tourist industry often do.
|Effective tax rate:||0.41%|
|State median home value:||$142,700|
|Median real estate taxes paid:||$587|
|Median household income:||$50,536|
With an effective property tax rate of 0.41% and the eighth-lowest median home value in the U.S., Alabama offers a homeowner-friendly tax environment overall. Plus, its 4% sales tax is also among the lowest in the U.S., while its income tax ranges between 2% and 5% — making this an attractive location for those looking to own a larger home on a lower budget.
|Effective tax rate:||0.51%|
|State median home value:||$343,300|
|Median real estate taxes paid:||$1,756|
|Median household income:||$72,331|
Although Colorado's property tax rate sits at 0.51%, higher home values than in other states with similarly low property tax rates actually leave homeowners here with a bill that's three times higher than in Alabama. And, while the state income tax sits at a middling 4.63%, Coloradoans do benefit from the lowest sales tax in the country at 2.9%. That's surpassed only by the seven states that levy no state sales tax at all.
|4. Puerto Rico|
|Effective tax rate:||0.52%|
|State median home value:||$111,500|
|Median real estate taxes paid:||$577|
|Median household income:||$20,539|
|Effective tax rate:||0.55%|
|State median home value:||$163,100|
|Median real estate taxes paid:||$890|
|Median household income:||$49,469|
|6. Washington, D.C.|
|Effective tax rate:||0.56%|
|State median home value:||$601,500|
|Median real estate taxes paid:||$3,378|
|Median household income:||$86,420|
|7. South Carolina|
|Effective tax rate:||0.57%|
|State median home value:||$162,300|
|Median real estate taxes paid:||$924|
|Median household income:||$53,199|
|Effective tax rate:||0.57%|
|State median home value:||$251,100|
|Median real estate taxes paid:||$1,431|
|Median household income:||$68,287|
|9. West Virginia|
|Effective tax rate:||0.58%|
|State median home value:||$119,600|
|Median real estate taxes paid:||$698|
|Median household income:||$46,711|
|Effective tax rate:||0.6%|
|State median home value:||$267,900|
|Median real estate taxes paid:||$1,614|
|Median household income:||$60,365|
For an easier overview of the differences in tax rates among the states with the highest property taxes, explore our chart below:
Homeownership by State
Although some states with low property taxes do have a significantly higher rate of homeownership than those with high levels of taxation, there's no clear correlation between a state's level of property taxation and its homeownership rates.
For example, West Virginia features one of the lowest property tax rates in the U.S. at 0.58%, as well as the highest rate of homeownership of any state – or Washington, D.C. and Puerto Rico –, with 73% of its residential real estate being owner-occupied. Alternatively, Vermont's 1.9% average effective property tax rate is the fifth highest in the U.S., but the state still has the sixth-highest homeownership rate in the country with 71% of its housing owner-occupied.
For a clear overview of homeownership rates by state, explore the table below and see the percentage of owner-occupied and renter-occupied housing in each state.
|States & Territories||Owner-Occupied Housing (%)||Renter-Occupied Housing (%)|
Map of Homeownership by State
For a quick overview of homeownership rates in each state (as well as Washington, D.C. and Puerto Rico), explore the interactive table below. Hover over or zoom in on each state to quickly see the percentage of owner-occupied housing and the percentage of renter-occupied housing.
State-to-state migration — also referred to as domestic migration — is an important driver of changing demographics within the U.S. Undoubtedly, the taxation environment is one factor that can influence domestic migration, as homeowners looking for an ownership-friendly tax environment may want to relocate to a state with low property taxes, especially if they aspire for large acreages.
However, property taxes are just one of many factors that influence domestic migration. Education and employment opportunities are two of the biggest factors for domestic migration, as well as urbanization, family, climate, lifestyle and crime rates. Furthermore, the overall tax environment and a state's social safety services, as well as its incentives, also contribute to state-to-state migration. For example, those interested in starting a business may be enticed to relocate to a state that offers attractive tax incentives to new businesses.
Explore the table below for a quick overview of each state's total population, population inflow and outflow, and overall net migration.
|States & Territories||Total Population||Population Inflow||Population Outflow||Net Migration|
Data concerning median real estate taxes paid, the state (including D.C. and the Commonwealth of Puerto Rico) median home value, the median household income, occupied housing units, owner-occupied housing units, and renter-occupied housing units was extracted from the U.S. Census Bureau's 2015-2019 American Community Survey 5-Year Estimates and the Puerto Rico Community Survey 5-Year Estimates.
Data concerning domestic migration, population inflow and population outflow was extracted from the U.S. Census Bureau's 2019 American Community Survey 1-Year Estimates.
Limited data concerning state income and sales taxes was extracted from the Tax Foundation's 2020 Facts & Figures report.
The average effective tax rate (also referred to as effective tax rate on this page) was calculated by dividing the median real estate taxes paid by the median home value.
Median home value has been defined as the assessed median home value. However, it's important to note that the assessment refers not to a tax assessor's valuation, but to the assessment of American Community Survey respondents of what their property might sell for if it were on the market.
The percentage of owner-occupied housing units has been calculated dividing the number of owner-occupied housing units by the number of occupied housing units in each state. The percentage of renter-occupied housing units has been calculated by dividing the number of renter-occupied housing units by the number of occupied housing units in each state.
Inflow has been defined as the number of people that have moved to one specific state from the rest of the U.S. Outflow has been defined as the number of people that have moved from one specific state to the rest of the U.S. Net migration has been calculated by determining the difference between population inflow and outflow in each state.
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