While some states have higher property taxes than others, it is good news for homeowners that there are 23 states in the US with property tax rates below 1.00%.
Property tax is a real estate ad-valorem tax that is paid by the property owner to the jurisdiction in which the property is located. These taxes are determined by multiplying the property tax rate by the current market value and are recalculated annually.
The money collected from property taxes is utilized for a wide range of purposes, such as funding education, infrastructure, law enforcement, parks and recreation, public transportation, and water and sewer improvements.
Hawaii tops the list of states with lowest property taxes in the US
Hawaii takes the crown for having the lowest property tax rate in the US, with a rate of 0.27%. Despite the low rate, homeowners in Hawaii should expect to pay around $1,607 in property taxes due to the state’s high median house cost. Alabama follows closely with a property tax rate of 0.42% and one of the lowest median home prices in the country at $137,200. This makes the median annual tax only $572.
Louisiana takes the third spot on the list with a property tax rate of 0.53%. This rate is less than half of the national average of 1.08%. One reason for the low property taxes in Louisiana is the state’s homestead exemption, which reduces the taxable value of owner-occupied properties by $7,500 in assessed value. Colorado and the District of Columbia both have a property tax rate of 0.53% and 0.55%, respectively, taking the fourth and fifth spots on the list.
While it may be tempting to move to a state with lower property taxes, it’s important to consider the overall cost of living in the state. States with lower property taxes may have higher costs elsewhere, such as a high sales tax, to make up for the costs. As with any financial decision, it’s important to weigh the pros and cons and determine what works best for your individual circumstances.
State / Property Tax Rate / Median Annual Tax
- Hawaii – $281 – $1,529
- Alabama – $406 – $587
- Colorado – $505 – $1,575
- Louisiana – $551 – $795
- South Carolina – $566 – $851
- Delaware – $568 – $1,431
- Nevada – $572 – $1,489
- Utah – $575 – $1,576
- District of Columbia – $575 – NA
- West Virginia – $584 – $653
- Wyoming – $605 – $1,256
- Arkansas – $620 – $798
- Arizona – $644 – $1,499
- Idaho – $659 – $1,322
- Tennessee – $685 – $1,120
- California – $742 – $3,818
- Mississippi – $795 – $879
- New Mexico – $796 – $1,272
- Virginia – $815 – $2,049
- North Carolina – $818 – $1,378
- Montana – $827 – $1,756
- Indiana $833 – $1,130
- Kentucky – $851 – $1,120
Source: www.marca.com
