If you are choosing where to live partly on taxes, property tax matters as much as income tax — and the spread between states is huge. This guide ranks the lowest-property-tax states by effective rate, the share of a home’s value paid in tax each year, using the U.S. Census Bureau’s American Community Survey (ACS) 2023 5-year estimates.
How we measure it. Effective rate = median real estate taxes paid ÷ median home value × 100 (Census ACS, 2023 5-year, US public domain). These are area medians, not your individual bill — see our methodology.
The lowest-property-tax states by rate
| Rank | State | Effective rate | Typical bill | Median home value |
|---|---|---|---|---|
| 1 | Hawaii | ~0.27% | ~$2,177 | ~$814,000 |
| 2 | Alabama | ~0.40% | ~$793 | ~$197,000 |
| 3 | Colorado | ~0.48% | ~$2,494 | ~$518,000 |
| 4 | Nevada | ~0.49% | ~$1,999 | ~$410,000 |
| 5 | South Carolina | ~0.51% | ~$1,226 | ~$248,000 |
| 6 | Utah | ~0.53% | ~$2,397 | ~$461,000 |
See the full ranking of all 51 states and DC on the lowest property-tax states page.
Why a low rate is not always a low bill
Hawaii has the lowest rate in the country, but because its homes are so expensive the dollar bill lands in the middle of the pack. For the smallest actual bill, look at states with both a low rate and modest home values — Alabama ($793) and South Carolina ($1,226) are the clearest examples.
This is the single most common mistake people make comparing states: they look at the rate or the bill in isolation. Use the estimator with a realistic home value for the area you’re considering to get a true comparison.
Why these states tax property lightly
- Other revenue sources. Nevada has no state income tax and leans on gaming and sales taxes; Hawaii relies heavily on tourism. Property tax does less of the work.
- Assessment caps and exemptions. Several low-rate states cap how fast assessed value can rise or offer generous homestead exemptions, holding the effective rate down.
- State funding of schools. Where the state (rather than local property tax) funds more of public education, local property-tax rates are lower.
How to use this
Pick the state page for anywhere you’re considering — it shows the effective rate, the typical bill, and a county-by-county table, because rates vary widely within a state too. Then compare with the highest property-tax states to see the full range, and read how property taxes are calculated so the numbers make sense.