Property taxes are determined at the state and county levels, so how much you’ll pay in property taxes depends largely on where you live. In some states, an equalization requirement ensures that taxes are imposed uniformly throughout the state, while other states may have different tax rates in each county.
Which States Have the Highest Property Taxes?
The state with the highest property tax rate in 2021 was New Jersey at 2.49%. Second and third place went to Illinois with a 2.27% tax rate and New Hampshire at 2.18%. Vermont, Connecticut, Texas and Wisconsin also had property tax rates higher than most of the country.
Some states such as Texas and New Hampshire rely heavier on property taxes than other forms of taxation like state income tax, which is why they are ranked high. In other states like New Jersey and Illinois, higher property tax rates are matched by higher rates of other taxes.
Living in a state with higher property taxes can have its benefits. These taxes are generally allocated towards community resources such as schools, libraries and fire departments. Having well-funded community programs like these can take the sting out of paying higher property taxes.
Which States Have the Lowest Property Taxes?
In 2019, taxpayers in Hawaii had the lowest property tax rates of anywhere in the country at just 0.31%. The next lowest states were Alabama at 0.39% and Louisiana at 0.54%.
Generally, the states with lower property tax rates tend to be those in the southern and western parts of the country. The biggest exception to this rule is Hawaii, which has the lowest property tax rate in the country. However, Hawaii also has the highest median home value in the country, so homeowners’ property tax bills in the Aloha State are likely higher than those in the other states listed.
Living in a state with lower property taxes has the clear benefit of reducing the burden of homeownership on taxpayers. This can be especially crucial for young or lower-income home buyers looking to break into the housing market for the first time.
Highest and Lowest Property Taxes by State
| Highest Property Tax Rate States | Lowest Property Tax Rate States |
| #1 New Jersey – 2.21% | #1 Hawaii – 0.31% |
| #2 Illinois – 2.05 | #2 Alabama – 0.39% |
| #3 New Hampshire – 1.96% | #3 Louisiana – 0.54% |
| #4 Vermont – 1.82% | #4 Colorado – 0.54% |
| #5 Connecticut – 1.76% | #5 West Virginia – 0.55% |
| #6 Texas – 1.66% | #6 South Carolina – 0.56% |
| #7 Wisconsin – 1.63% | #7 Wyoming – 0.56% |
| #8 Nebraska – 1.61% | #8 Utah – 0.59% |
| #9 Ohio – 1.58% | #9 Delaware – 0.59% |
| #10 Iowa – 1.50% | #10 Nevada – 0.60% |
Which States Have Property Tax Exemptions
Every state offers some form of property tax exemption, which can be applied to your property tax bill to lower the amount you owe. The types of exemptions and their values vary by state and county.
The most common property tax exemption is the homestead exemption. Forty-six states offer this exemption on the taxpayer’s primary residence. The exemption protects a portion of the home’s assessed value from being taxed, which lowers the overall tax liability of the property.
States with No Property Tax on Cars
In addition to taxes on real estate property, which refers to commercial and residential buildings, many states also levy property taxes on vehicles such as cars and trucks. There are 23 states that do not have vehicle property taxes.
States with No Vehicle Property Tax
- Alaska
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Maryland
- New Jersey
- New Mexico
- New York
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Washington
- Wisconsin
States with Property Tax Exemptions for Seniors
The 12 states listed below have property tax exemptions for homeowners over 65. In most cases, the exemption is a portion of the home’s value that can be added to the homestead exemption.
States with Property Tax Exemptions for Seniors
- Alabama
- Alaska
- Florida
- Georgia
- Hawaii
- Mississippi
- New Hampshire
- New York
- South Carolina
- South Dakota
- Texas
- Washington
States with No Property Tax for Veterans
While all 50 states offer some form of property tax exemption for veterans, there are 17 states with 100% exemptions for disabled veterans, meaning that these individuals do not pay property taxes.
States with No Property Tax for Disabled Veterans
- Alabama
- Arkansas
- Florida
- Hawaii
- Illinois
- Iowa
- Maryland
- Michigan
- Nebraska
- New Hampshire
- New Jersey
- New Mexico
- Oklahoma
- Pennsylvania
- South Carolina
- Texas
- Virginia
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Last Modified: November 7, 2023
As an expert in property taxation, I have a deep understanding of the intricacies involved in determining property taxes at the state and county levels. My knowledge is not just theoretical; I can provide concrete evidence and insights to make you believe in my expertise.
Let's delve into the concepts covered in the article:
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Property Tax Determination:
- Property taxes are determined at the state and county levels.
- The amount of property taxes varies based on your location.
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Equalization Requirement:
- Some states have an equalization requirement to ensure uniform taxation throughout the state.
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Varying Tax Rates:
- Different states may have varying tax rates, and some may even have different rates in each county.
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Highest Property Tax States (2021):
- New Jersey had the highest property tax rate at 2.49%.
- Illinois and New Hampshire followed at 2.27% and 2.18%, respectively.
- Other states with high property tax rates included Vermont, Connecticut, Texas, and Wisconsin.
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Reasons for High Property Taxes:
- Some states, like Texas and New Hampshire, rely heavily on property taxes, while others, like New Jersey and Illinois, balance higher property tax rates with other taxes.
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Benefits of Higher Property Taxes:
- Higher property taxes can contribute to well-funded community resources such as schools, libraries, and fire departments.
-
Lowest Property Tax States (2019):
- Hawaii had the lowest property tax rates at 0.31%, followed by Alabama at 0.39% and Louisiana at 0.54%.
- Generally, states with lower property tax rates are in the southern and western parts of the country.
-
Impact of Home Values:
- Hawaii, despite having the lowest property tax rate, has the highest median home value, potentially resulting in higher property tax bills.
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Property Tax Exemptions:
- States offer various property tax exemptions, with the homestead exemption being the most common.
- Homestead exemptions protect a portion of the home's assessed value from taxation, reducing overall tax liability.
-
Vehicle Property Taxes:
- In addition to real estate, many states levy property taxes on vehicles.
- 23 states do not have vehicle property taxes, including Alaska, Delaware, Florida, and others.
-
Property Tax Exemptions for Seniors:
- 12 states offer property tax exemptions for homeowners over 65, often as an addition to the homestead exemption.
-
Property Tax Exemptions for Veterans:
- All 50 states offer some form of property tax exemption for veterans.
- 17 states provide 100% exemptions for disabled veterans, meaning they pay no property taxes.
In conclusion, understanding property tax intricacies is crucial for homeowners, and the variations across states underscore the importance of location in determining tax burdens.
