Property taxes can make or break your budget as a homebuyer. That’s especially true if you live in one of the higher property tax states in the U.S. New Jersey, for example, has the the highest property tax rate in the nation at 2.26%, while Hawaii has the lowest at 0.27%. There are 20 states with property tax rates above the national average of 0.99%. If you want to see which states have the lowest property taxes, here’s a breakdown of the 10 states with the lowest property taxes in the U.S.
If you are a homeowner, afinancial advisor can help optimize your tax planning.
What Are Property Taxes?
Property taxes in the U.S. are collected by local governments and usually based on the value of the property. The rates can vary from county to county and state to state. Property taxes generally pay for community safety, schools, infrastructure and other public projects.
If you’re in the market to buy a home, you need to consider how much property taxes will cost as part of your overall budget. As with other types of taxes, this is an expense that can generally increase over time.
10 States With the Lowest Property Tax Rates in the U.S.
The average property tax for the 10 states with the lowest rate is less than half (0.47%) of the U.S. national median, which is 0.99%. Below, we take a closer look at the 10 states with the lowest property tax rates in the country. All of the data below comes from the Census Bureau’s 2021 1-year American Community Survey (ACS) Estimates.
Hawaii has the lowest property tax rate in the U.S. at 0.27%. The Aloha state has a home median value of $722,500. For a comparison with New Jersey, the state with the highest effective property tax rate in the nation at 2.26%, Hawaii’s $389,800 home median value is just over twice the home median value of the Garden State. Hawaiian homeowners pay $1,971 in median real estate taxes per year.
Alabama is generally one of the more affordable states in the country. At 0.39%, it has the second-lowest property tax rate nationwide anda home median value of $172,800, which is almost $109,000 lower than the national home median value ($281,400). Homeowners in this state pay $674 annually in median real estate taxes.
Nevada is tied with Colorado for the third-lowest property tax rate in the nation (0.48%). The $373,000 home median value in this state, however, is almost $92,000 higher than the nation’s home median value of $281,400. But homeowners in the Sagebrush state pay $1,807 in median real estate taxes annually, which is $988 less than the median real estate taxes paid in the U.S.
Colorado ties with Nevada for the third-lowest property tax rate at 0.48%. But its home median value is $466,200, which is roughly $93,000 higher than Nevada’s figure. This is the sixth-highest home median value, after Hawaii, the District of Columbia, California, Washington and Massachusetts. Homeowners in the Centennial State pay $2,259 annually in median real estate taxes.
At 0.49%, the Gem State has the fourth-lowest property tax rate in the country. Homeowners in Idaho pay $1,817 annually in median real estate taxes, which is almost $1,000 lower than the median real estate taxes paid nationwide. Home median value in this state, however, is $369,300, which is nearly $88,000 more than the national home median value of $281,400.
The Grand Canyon state has the fifth-lowest property tax rate in the U.S. at 0.51%. It also features the 16th-highest home median value at $336,000. Homeowners in Arizona pay $1,707 annually in median real estate taxes, which is more than $1,000 lower than the median real estate taxes paid nationwide.
Utah’s0.52% property tax rate is tied with South Carolina for the sixth-lowest in the country. But while property taxes are lower here than the 0.99% national rate, the home median value is the eighth-highest in the U.S. ($421,700). Homeowners in the Beehive State pay $2,191 annually in median real estate taxes, which is roughly $600 less than what Americans pay nationwide.
8. South Carolina
The Palmetto State ties with Utah as the sixth-lowest property tax rate in the nation at 0.52%. Generally an affordable state, home median value in South Carolina is $213,500, which is almost $68,000 less than the U.S. home median value. Homeowners in this state pay $1,105 annually in median real estate taxes, which is $1,690 less than what Americans pay nationwide.
Standing at 0.53%, Delaware has the seventh-lowest property tax rate in the country. The state’s home median value is $300,500, which is slightly above the national home median value of $281,400. Homeowners in The First State pay $1,602 annually in median real estate taxes, which is almost $1,200 lower than median real estate taxes paid in the U.S..
Wyoming rounds out the list of 10 states with the lowest property taxes with a 0.55% rate. Home median value in the Equality State is $266,400, which is $15,000 lower than the national home median value of $281,400. Homeowners in this state pay $1,452 annually in median real estate taxes, which is $1,343 less than the median real estate taxes paid in the U.S.
Property Tax Figures for All 50 States and Washington, D.C.
To see how your state compares with the rest of the country, we break down the medianhome value, median real estate taxes paid and the effective property tax rate for each state. Again, data for the table below comes from the Census Bureau’s 2021 1-year American Community Survey (ACS) Estimates.
|Property Taxes Across the U.S.|
|Location||Median Home Value||Median Real Estate Taxes Paid||Effective Property Tax Rate|
|District of Columbia||$669,900||$3,699||0.55%|
When preparing to buy a home, you must factor in how much you will pay for property taxes, which vary nationwide depending on your location. As an example, homeowners in New Jersey pay $8,796 annually, which is the highest rate in the country. This is just over three times the$2,795 median real estate taxes paid at the nationwide level. And, comparatively, Alabama homeowners pay only $674 per year, the lowest median real estate taxes in the U.S.
Tax Planning Tips for Homeowners
- Afinancial advisorcan help you create a tax plan for your home and other real estate investments. Finding a financial advisor doesn’t have to be hard.SmartAsset’s free toolmatches you with up to three financial advisorswho serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals,get started now.
- Property tax bills can change on an annual basis, depending on the value of the properties that you own.If you’re planning to buy a new home, SmartAsset’s property tax calculator can help you get the latest rates and forecast your annual property tax bill.
Photo credit: ©iStock.com/kate_sept2004, ©iStock.com/Francesco Scatena
At the top of the list of states with the lowest tax burden is Alaska, with a state-local tax burden of only 4.60%. Alaska stands out for its unique revenue system, as it relies heavily on oil and gas revenues rather than imposing income or sales taxes on its residents.What state has the lowest taxes 2023? ›
At the top of the list of states with the lowest tax burden is Alaska, with a state-local tax burden of only 4.60%. Alaska stands out for its unique revenue system, as it relies heavily on oil and gas revenues rather than imposing income or sales taxes on its residents.What state pays the lowest property taxes? ›
All of the data below comes from the Census Bureau's 2021 1-year American Community Survey (ACS) Estimates. Hawaii has the lowest property tax rate in the U.S. at 0.27%. The Aloha state has a home median value of $722,500.What is the most tax-friendly state to live in? ›
MoneyGeek's analysis found that Wyoming is the most tax-friendly state in America, followed by Nevada, Tennessee, Florida and Alaska. States that received a grade of A all share something in common: no state income tax. Washington and South Dakota — which both received a B — also have no state income tax.What state has the lowest property taxes for retirees? ›
- Alabama. Alabama is one of the few states with absolutely no property taxes for seniors. ...
- Alaska. Retirees over 65 get a tax exemption for the first $150,000 of their house's value. ...
- Florida. Florida is another great state for seniors who don't want to pay property taxes. ...
- Georgia. ...
- Mississippi. ...
- South Dakota. ...
- Hawaii. ...
States with a perfect score on the individual income tax component (Alaska, Florida, South Dakota, and Wyoming) have no individual income tax and no payroll taxes besides the unemployment insurance tax. The next highest-scoring states are Nevada, Tennessee, Texas, Washington, and New Hampshire.Are taxes going down in 2023? ›
Although the tax rates didn't change, the income tax brackets for 2023 are much wider than for 2022. The difference is due to the rising inflation during the 12-month period from September 2021 through August 2022, which is used to calculate the adjustments.Which state has no property tax in USA? ›
Unfortunately, there are no states without a property tax. Property taxes remain a significant contributor to overall state income. Tax funds are used to operate and maintain essential government services like law enforcement, infrastructure, education, transportation, parks, water and sewer service improvements.Which city has lowest property tax? ›
Honolulu had the lowest effective property tax rate in 2022.
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Texas, Florida, Iowa, South Dakota, Kansas, and Oklahoma have some of the broadest homestead protections in the United States in terms of the value of property that can be protected.
1 state to retire for high quality of life: Massachusetts. Massachusetts is the best state for retirees based on the quality of life. While the state ranked in the bottom half of the list for affordability, it scored top marks for health care, coming in at second place.What is the best state to retire to avoid taxes? ›
States with no income tax
Retirement distributions from 401(k) plans or IRAs are considered income for tax purposes. Fortunately, there are some states that don't charge taxes on retirement income of any kind: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.
The state with the lowest property tax rate is Hawaii, giving investors even more reason to consider the Aloha State. Though their effective property tax rate is a low 0.28%, there are actually several states with property taxes under 1%.Where is the best place to retire with taxes? ›
- South Dakota.
Social Security benefits may or may not be taxed after 62, depending in large part on other income earned. Those only receiving Social Security benefits do not have to pay federal income taxes.Which states tax Social Security? ›
You might also owe state taxes on the benefits depending on where you live. For the 2022 tax year, 11 states tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont.What states have no income tax in 2023? ›
As of 2023, eight states — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming — do not levy a state income tax. A ninth state, New Hampshire, does not tax earned income, but it does impose a 4% tax on dividends and interest.What are the major tax changes for 2023? ›
Standard deduction increase: The standard deduction for 2023 (which'll be useful when you file in 2024) increases to $13,850 for single filers and $27,700 for married couples filing jointly. Tax brackets increase: The income tax brackets will also increase in 2023.How to reduce taxes in 2023? ›
- Contribute to a 401(k) or Traditional IRA.
- Enroll in Your Employee Stock Purchasing Program.
- Deduct Business Expenses.
- If You Can, Invest in Qualified Opportunity Funds.
- Donate Stocks Through Donor-Advised Funds.
- Sell Poor-Performing Stocks.
- Deduct Student Loan Interest.
In addition to raising the top individual rate, the President's budget proposal would lower the threshold at which the top rate takes effect; to illustrate, the 2023 top rate of 37% applies once taxable income exceeds $578,125 for a single filer and $693,750 for those married filing jointly.
How Much is the Standard Deduction for 2023? If you are at least 65 years old or blind, you can claim an additional 2023 standard deduction of $1,850 (also $1,850 if using the single or head of household filing status). If you're both 65 and blind, the additional deduction amount is doubled.What is the tax proposal for 2023? ›
Introduced in House (01/09/2023) This bill imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income taxes, payroll taxes, and estate and gift taxes.Why is Hawaii property tax so low? ›
A major reason Hawaii has low property taxes is that it offers generous exemptions on owner-occupied residences. Homeowners are eligible for exemptions ranging from $80,000 to $160,000, depending on their county of residence.Which U.S. city has the highest property taxes? ›
- Rochester, New York.
- Hartford-East Hartford-Middletown, Connecticut. ...
- Chicago-Naperville-Elgin, Illinois. ...
- Buffalo-Cheektowaga, New York. ...
- Cleveland-Elyria, Ohio. ...
- Dallas-Fort Worth-Arlington, Texas. Effective property tax rate for owner-occupied homes: 1.6% ...
The City of Stafford holds the unique distinction of being the largest city in Texas to abolish city property taxes. This includes both commercial and residential properties. In addition to a lack of city property taxes, the State of Texas has no state property taxes.What city is best to live tax free? ›
1. Cheyenne, Wyoming. While not an obvious candidate, Cheyenne, Wyoming tops the list of U.S. cities with the lowest tax rates. Cheyenne tax rates are low across the board, with an average 9.7% rate for lower-income families.What county has the lowest property taxes? ›
- Benzie County, Michigan (0.02%)
- Montgomery County, Kansas (0.10%)
- Benton County, Missouri (0.10%)
- Blair County, Pennsylvania (0.11%)
- Angelina County, Texas (0.14%)
What is the Florida Property Tax Rate? Florida's average real property tax rate is 0.98%, which is slightly lower than the U.S. average of 1.08%. The average Florida homeowner pays $1,752 each year in real property taxes, although that amount varies between counties.What state has the cheapest land for homesteading? ›
Arizona. A desert climate will be a challenge, but not an impossibility, for growing your own crops and farming the land. It's one of the cheapest (if not the cheapest) of all 50 states to buy land in, but you'll need to check whether the specific location you might have in mind actually allows for homestead building.What states are easiest to homestead in? ›
Climate & Natural Resources
I often see Arizona and Nevada in lists of the best states for homesteading. Sure, land in those states might be very cheap – but it is cheap for a reason! Without natural resources like water and rich soil, you'll have a hard time living off of the land.
If you are age 55 or older, you may have a significant equity in your home. California provides a special homestead exemption for seniors age 65 and over, people who are disabled, and people age 55 and over with low incomes.What is the cheapest state to retire in 2023? ›
Rather, Alabama is the most affordable state to retire in, according to WalletHub's “2023 Best States to Retire.” The analysis compared all 50 states across three key categories: health care, quality of life and affordability.Which states not to retire in? ›
Kentucky ranks as the worst state to take up retirement in 2023, according to a WalletHub study. This year, the state landed in last place which was occupied by New Jersey in 2022. WalletHub ranked all 50 U.S. states based on three key categories: affordability, quality of life and health care.What states are retirees happiest? ›
The best state to retire: Vermont
Vermont quietly has a lot going for it, including very good scores in public health, crime, quality of life, and cost of living. It also has lower-than-average housing costs as well as reasonable taxes for retirees.
To acquire the full amount, you need to maximize your working life and begin collecting your check until age 70. Another way to maximize your check is by asking for a raise every two or three years. Moving companies throughout your career is another way to prove your worth, and generate more money.What state does not tax Social Security benefits? ›
Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming have sales taxes but no state income, Social Security or pension income tax. Delaware, Montana and Oregon do not have a sales tax.How can I avoid paying high taxes in retirement? ›
- Remember to Withdraw Your Money From Your Retirement Accounts.
- Understand Your Tax Bracket.
- Make Withdrawals Before You Need To.
- Invest in Tax-Free Bonds.
- Invest for the Long-Term, Not the Short-term.
- Move to a Tax-Friendly State.
- Bottom Line.
- Tips for Being More Tax-Efficient.
Massachusetts and Oregon have the lowest threshold for estate taxes since they impose taxes on all estates worth more than $1 million. Washington has the highest estate tax at 20%, which is applied to the portion of an estate's value greater than $11,193,000.Why are Texas property taxes so high? ›
“Property taxes in Texas are so high because that's the price we pay for not having a personal income tax in this state,” Craymer said. State tax systems are usually looked at as a three-legged stool — one leg is property tax, the second leg is sales tax, and the third leg is the personal income tax.Are property taxes high in Florida? ›
What Are the Average Property Tax Rates in Florida? According to the Tax Foundation, Florida ranks No. 26 when it comes to property taxes paid as a percentage of housing value, with an effective property tax rate of 0.91%. But remember, not everyone in Florida has the same property tax rate.
Some of the most popular countries that offer the financial benefit of having no income tax are Bermuda, Monaco, the Bahamas, and the United Arab Emirates (UAE). There are a number of countries without the burden of income taxes, and many of them are very pleasant countries in which to live.Where is the best place to retire in the US? ›
Maine topped The Motley Fool's list of best U.S. states to retire, with high marks for quality of life, safety, and health care cost and quality. The state has the highest percentage of residents over age 65, so retirees can find like-minded neighbors who enjoy the outdoors, natural beauty, and reliable health care.Is it better to pay taxes now or when you retire? ›
As a rule of thumb, investors should pay taxes in years when they are in lower tax brackets and take tax deductions in years when they fall into higher tax brackets.What is the Social Security 5 year rule? ›
You must have worked and paid Social Security taxes in five of the last 10 years. • If you also get a pension from a job where you didn't pay Social Security taxes (e.g., a civil service or teacher's pension), your Social Security benefit might be reduced.Does a 75 year old have to file taxes? ›
In short, senior citizens are largely subject to the same tax requirements as other adults. There is no age at which you no longer have to submit a tax return and most senior citizens do need to file taxes every year. However if Social Security is your only form of income then it is not taxable.At what age do you get 100 of your Social Security benefits? ›
You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.What is the most tax-friendly state for seniors? ›
1. Alaska. Alaska is the most tax-friendly state for retirees because it has no state income tax or tax on Social Security. And its sales tax rate is the fourth lowest on our list - fifth lowest in the U.S. But keep this in mind: The cost of living in Alaska is higher than in most states.What state has cheapest property tax? ›
All of the data below comes from the Census Bureau's 2021 1-year American Community Survey (ACS) Estimates. Hawaii has the lowest property tax rate in the U.S. at 0.27%. The Aloha state has a home median value of $722,500.What is the lowest federal tax bracket for 2023? ›
|Tax rate||Taxable income bracket||Tax owed|
|10%||$0 to $15,700.||10% of taxable income.|
|12%||$15,701 to $59,850.||$1,570 plus 12% of the amount over $15,700.|
|22%||$59,851 to $95,350.||$6,868 plus 22% of the amount over $59,850.|
|24%||$95,351 to $182,100.||$14,678 plus 24% of the amount over $95,350.|
The ten states with the highest tax burdens are New York, Connecticut, Hawaii, Vermont, California, New Jersey, Illinois, Virginia, Delaware, and Maine. New York tops the list of states with the highest taxes, with a tax burden of 15.90%, ranking first overall.
Single filers who are younger than 65 years old must file taxes if they earn more than 12,950 dollars per year, while those who are 65 or older need to do so if they make more than 14,700 dollars.What are the tax changes for 2023? ›
For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400 from the amount for tax year 2022.How much can a 70 year old earn without paying taxes? ›
Basically, if you're 65 or older, you have to file a tax return in 2022 if your gross income is $14,700 or higher. If you're married filing jointly and both 65 or older, that amount is $28,700. If you're married filing jointly and only one of you is 65 or older, that amount is $27,300.What state has the worst taxes? ›
The states with the highest sales tax burden are Hawaii (6.71%), Washington, (5.66%) and New Mexico (5.62%), while the states with the lowest sales tax burden are New Hampshire (1.07%), Delaware (1.09%) and Oregon (1.11%).Which state is the best when it comes to taxes? ›
In 2020, the average American contributed 8.9% percent of their income in state taxes. Alaska had the lowest average overall tax burden – measured as total individual taxes paid divided by total personal income – at 5.4%, followed by Tennessee (6.3%), New Hampshire (6.4%), Wyoming (6.6%) and Florida (6.7%).How can I make tax free money? ›
- Take full advantage of 401(k) or 403(b) plans. ...
- Move to a tax-free state. ...
- Contribute to a health savings account. ...
- Itemize your deductions. ...
- Use tax-loss harvesting.
In plain language, the taxpayer is entitled to receive a refund for the amounts paid through withholding because the claim for refund was filed within three years of the original return and by the last possible date of the lookback period under Notice 2023-21 (i.e., July 15, 2020, plus three years).Do seniors on Social Security have to file taxes? ›
Some of you have to pay federal income taxes on your Social Security benefits. This usually happens only if you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return).Does Social Security count as income? ›
You report the taxable portion of your social security benefits on line 6b of Form 1040 or Form 1040-SR. Your benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status.How much can a retired person earn without paying taxes in 2023? ›
In 2023, this limit on your earnings is $56,520.
If you receive survivors benefits, we use your full retirement age, for retirement benefits when applying the annual earnings test (AET) for retirement or survivors benefits.