The states with the bottom property taxes within the US

DEPENDING on where you live, the cost of your home might be far more expensive than the price on the “for sale” sign.

Property taxes, also known as real estate taxes, can add a massive burden to your monthly bills in certain states, while others have far lower tax burdens.

Property taxes vary significantly based on your state and county

Homeowners can’t avoid paying property taxes, but they can protect their wallets by living in areas with low rates.

And according to Zillow’s home value index, house prices have gone up 20% since the start of 2021 making it even more important for homeowners to find ways to save money at the margins.

For reference, New Jersey levies the highest property taxes in the country, at 2.49%, and the median state, Florida, taxes real estate at 0.89%.

Below are the states with the 10 lowest property tax rates in the U.S. and how much the average homeowner pays in each.

10. Arkansas

Effective property tax rate: 0.62%
Average home value: $169,000
Average property tax payment: $1,048

One of many southern states with a low property tax rate, Arkansas also has the third-lowest average home value.

Arkansas also benefits from certain state tax laws that other states on this list similarly employ.

Most notably, taxes are based on the assessed value of a property, which Arkansas has set as 20% of the actual value.

In practice, that means a homeowner with a $100,000 house is only being taxed on $20,000 of that value.

While the value is great for homeowners, Arkansas’s relatively high income and sales taxes place it in the middle of the pack for overall affordability.

However, Arkansas ranks 48th in median household income

9. Wyoming

Effective property tax rate: 0.61%
Average home value: $309,000
Average property tax payment: $1,885

Wyoming property values are assessed at 9.5% of their market value, meaning Wyomingites only have to pay taxes on a tenth of their home’s value making it a very affordable state for homeowners.

In addition to some of the nation’s lowest property taxes, Wyoming doesn’t have a state income tax.

While the state has a higher average property value than most other states on this list, that combination of low taxes makes it an enticing spot to buy a home.

8. Nevada

Effective property tax rate: 0.60%
Average home value: $434,000
Average property tax payment: $2,604

Nevada has been labeled a tax haven for the wealthy and powerful, but some of those low tax laws benefit average homeowners too.

One of the key contributing factors to Nevada’s low effective tax rate is an abatement law passed in 2005 that prevents property taxes on residential properties from increasing by more than 3% in a given year.

And while not as generous as Wyoming or Arkansas’ assessment policy, Nevada only taxes against 35% of a home’s value.

7. West Virginia

Effective property tax rate: 0.58%
Average home value: $129,000
Average property tax payment: $748

Many states have vastly disparate property tax rates in different counties, charging some homeowners far more than others, but West Virginia’s 55 counties all feature effective tax rates lower than the national average.

And despite the lack of a year-over-year increase limit like Nevada, West Virginia mandates that homeowners be notified if their property’s assessed value increases by 10% or $10,000 in one year, often giving them time to appeal the valuation and trim their taxes.

6. South Carolina

Effective property tax rate: 0.57%
Average home value: $268,000
Average property tax payment: $1,528

South Carolina has one of the most homeowner-friendly tax policies in the nation, assessing residential houses at just 4% of their appraised value.

Coupled with low sales taxes and an annual 15% cap on value increases, South Carolina is an affordable, attractive option for homeowners.

5. Delaware

Effective property tax rate: 0.57%
Average home value: $334,000
Average property tax payment: $1,904

Another well-known corporate tax haven, Delaware’s outdated tax code leads to some staggeringly low property tax rates.

Many state governments regularly assess home value to adjust property tax rates, but none of Delaware’s three counties have completed an assessment since the 1980s.

Tax rates are based on the home value at the time of the most recent assessment.

The effective rates in each county are very different, but Delaware homeowners are being taxed against decades-old property values.

The party is set to end in coming years as the state plans new assessments and tweaks to the tax law, but until then Delaware – particularly Sussex county at 0.34% – boasts some of the lowest property taxes in the U.S.

4. Louisiana

Effective property tax rate: 0.55%
Average home value: $206,000
Average property tax payment: $1,133

Like its northern neighbor Arkansas, Louisiana combines some of the lowest property taxes with some of the most affordable homes in the country.

Unfortunately, they also share low median income rankings – Louisiana checks in at 47th.

Two key statutes keep Louisiana’s rate so low: assessed home value in the state is 10% of market value, and Louisiana homeowners can reduce their taxable value through homestead exemptions of $7,500.

In reality, that translates to a $200,000 home being assessed at $20,000, and the owner being taxed against $12,500.

3. Colorado

Effective property tax rate: 0.51%
Average home value: $558,000
Average property tax payment: $2,846

Despite high and rising property values, Colorado maintains the third-lowest effective property tax rate in the nation.

Colorado’s low rates largely come from taxing a home’s assessed value, which the state set at 7.15% of market value, but some fear that Colorado homeowners will face a sudden tax reckoning after the next round of assessment.

Average property values in Colorado have soared by $100,000 since March 2021 according to Zillow, prompting the addition of a 2022 ballot amendment that would cap property tax hikes to 3% annually, like Nevada.

2. Alabama

Effective property tax rate: 0.41%
Average home value: $194,000
Average property tax payment: $795

The sixth most affordable state to live in based on the cost of living index, it’s no surprise that Alabama is replete with affordable housing.

The assessed value for residential property in Alabama is 10% of market value, and the state also offers homestead exemptions up to $6,000.

Alabama also has the seventh-lowest overall cost of living of any state, meaning it is a very cost-effective state for homeowners.

1. Hawaii

Effective property tax rate: 0.28%
Average home value: $842,000
Average property tax payment: $2,357

Since the state is almost entirely sustained by imports, Hawaii’s cost of living is nearly two times the national average and by far the highest in the country.

Despite this, Hawaii maintains a minuscule property tax rate largely through offering generous exemptions like the home exemption that allows homeowners to knock $100,000 off the assessed value of their primary residence.

Property tax rates are different in each of Hawaii’s four counties, but none is greater than 0.3%.

BONUS: Washington, D.C.

The nation’s capital sets its own property tax rate at 0.56%, which would be the fifth-lowest rate if D.C. was a state.

Like Hawaii, Washington D.C. is one of the most expensive places to live in the U.S., with an average property price of $703,000 according to Zillow, so district residents actually pay some of the most property taxes in terms of real dollars.