Are There Any States With No Property Tax? Lowest Property Tax Ranking 2024

Dreaming of a state free of property taxes? Bad news. In the land of the free, owning land, well, it ain’t tax-free.

The good news? Several states offer refreshingly low tax rates.

Throw a few generous exemptions into the mix, and homeownership just got a whole lot more bearable and potentially lucrative. Nice!

Ranked lowest to highest, here are the lowest property taxes by state in 2024.

What are Property Taxes?

Property taxes are annual (sometimes bi-annual) taxes that local governments levy on homeowners and real estate investors. They use the generated revenue to fund services like schools, fire departments, and maintaining roads.

And how’s it calculated?

The amount taxpayers have to cough up is typically based on the assessed value—basically, what a locally-appointed assessor thinks a property is worth.

State property tax rates aren’t a homogenous type of deal, though. Each American state (and even individual counties or cities) has different spending needs. Some communities and local governments prioritize education, while others focus on public safety or infrastructure.

Geographics and other such variables come into play here, too. Drier climates are prone to wildfires, coastal locations experience erosion issues, and areas prone to heavy snowfall require a lot of infrastructure maintenance.

There’s really no one-size-fits-all approach to property taxes.

Learn more: rental property tax guide for new and experienced landlords.

10 States With Lowest Property Tax in 2024

Here are the states with the most favorable effective tax rates:

1. Hawaii (0.29%)

2. Alabama (0.41%)

3. Colorado (0.51%)

4. Louisiana (0.56%)

5. South Carolina (0.56%)

6. Nevada (0.57%)

7. Utah (0.58%)

8. West Virginia (0.59%)

9. Wyoming (0.61%)

10. District of Columbia (0.64%)

Keep in mind: Governments can’t pull money for local initiatives from thin air. If it isn’t property taxes, it’ll be from elsewhere. Consider income tax and sales tax. Both can make quite a dent in a resident or landlord’s yearly budget.

For example, Alabama might rank second on the list of lowest property tax rates, but when you account for the state’s entire tax code, it ranks 39th on the Tax Foundation’s State Business Tax Climate Index.

So, do your research and find the state that best fits your overall financial goals and lifestyle.

Learn more: best places to buy rental properties.

States With Highest Property Tax Rates

Here are the states where you can expect the heftiest average property tax:

1. 42. New York (1.73%)

2. Ohio (1.53%)

3. Nebraska (1.67%)

4. Wisconsin (1.73%)

5. Texas (1.74%)

6. Vermont (1.90%)

7. Connecticut (2.15%)

8. New Hampshire (2.09%)

9. Illinois (2.23%)

10. New Jersey (2.47%)

A heads up: Before you write the above states off, remember that higher taxes often come with benefits worth considering. These states might have top-notch schools, solid infrastructure, or extensive public services.

Weigh up the pros and cons and decide what matters most to you.

That decision might come down to whether you’re a property investor or a resident. Income and sales taxes may not matter to you if you are renting out a property and aren’t living in the state yourself.

Learn more: tips for buying a rental property out of state.

All States Ranked by Property Tax Rates for 2024

How do the remainder of the states stack up? Take a look for yourself:

Learn more: property taxes by state lowest to highest.

Factors That Influence Property Tax

Why do your annual property taxes seem to increase year-over-year, even if your house hasn't magically grown a patio and a backyard pool?

These factors influence property tax rates:

1. Property Value

The higher a property’s value, the more real estate taxes you'll likely pay. Think of it this way: a sprawling mansion with a pool and a tennis court will probably have a heftier tax bill than a cozy, two-bedroom cottage.

But it's not just about the size of your house. Location plays a huge role, too. A beachfront condo in Miami will likely have a higher market value and, consequently, higher taxes than a similar-sized condo in a less desirable area.

2. Local Government Spending

Schools, fire departments, roads—they all need funding. Local tax rates are often influenced by how much your municipality spends on these services.

If your town is building a new school or investing in major infrastructure projects, those costs might be reflected in your property tax bill. Yup, unfortunately, taxes are unavoidable no matter where you live, particularly if a new seven-lane highway is in the works.

3. Tax Assessment Cycles

Most states have regular tax assessment cycles, where an assessor determines the market value of a property. The assessment directly impacts your tax bill.

These cycles can vary. Some localities assess every year, some bi-annually, while others push it out to 3-5 years. It all depends on the local jurisdiction.

Properties that are assessed less frequently are typically located where prices are stable. The opposite is true, as well. High price volatility means more frequent visits from the assessor.

4. Millage Rates

Millage rates are used to calculate a tax bill based on a property's assessed value. They are the tax levied per $1,000 of a property's assessed value. Basically, they’re a tax multiplier. Each local government (cities, counties, school districts, etc.) sets its own millage rate to fund its budget and services.

Here’s how millage rates look in action:

• Let’s say a property has an assessed value of $200,000.

• How’d we end up here? The local government sets a millage rate of 20 mills for this property (this means $20 for every $1,000 of assessed value).

So, to calculate your property tax, you'd do this:

1. Divide the assessed value by 1,000: $200,000 / 1,000 = 200

2. Multiply that number by the millage rate: 200 x 20 = $4,000

Voilà! The property tax bill would be $4,000.

5. Tax Exemptions and Deductions

Don't forget about tax breaks. Many states offer exemptions and deductions that can reduce your property tax burden.

Let’s explore this further:

Property Tax Exemptions and Deductions

Here's some good news: property tax exemptions and deductions can significantly reduce your tax burden. Win!

Who can benefit?

Although it helps if you’re a veteran, a senior citizen, or a farmer, really anyone can, as long as you meet certain criteria. Let's explore some of the most common ones:

Homestead and Agricultural Exemptions

You might qualify for a homestead or agricultural exemption if you're a landowner using your personal property as a primary residence and for farming purposes. These exemptions reduce the taxable home value, which means a lower annual tax bill.

So, how does it work?

Let's pretend your home is valued at $300,000, and your state offers a $50,000 homestead exemption. You'll only pay taxes on $250,000 of your home's value. Sweet deal.

Which states offer the best homestead exemptions?

The big agricultural states like Florida, Texas, Georgia, California, and Louisiana are known for their generous homestead exemptions.

Veteran's Exemptions

For those who have served, property tax exemptions can provide some much-needed tax relief. These exemptions are often available to disabled veterans, with the amount of the exemption varying depending on the veteran's disability rating.

States like New York, California, Texas, and Maryland offer substantial veteran's exemptions.

Senior Citizen Exemptions

Property taxes can become a significant financial burden as we reach our golden years. Thankfully, many states offer exemptions for senior citizens, typically those aged 65 or older.

Which states are most generous to seniors?

States like California, Illinois, Texas, New York, and Washington offer some of the most significant senior citizen exemptions.

Remember: These are just a few of the many property tax exemptions and deductions available. Keep up with your state's specific rules and requirements to see what you might qualify for. And keep in mind that exemptions change all the time, so do your own research.

Learn more: is rental property tax deductible?

Strategies for Minimizing Your Property Tax Rate

Feeling overwhelmed by those property tax bills? Don't wave the white flag just yet. You can use some strategies to lower your tax burden and keep more money in your pocket (where it belongs!).

1. Appeal Your Assessment

Remember that assessor who determines your property's assessed value? Sometimes they get it wrong. If you think your assessment is too high (and let's be honest, who doesn't?), you can appeal it.

Gather evidence to support your claim, like comparable median home value in your area or any unique features that might lower your property's value. Then, present your case to the local tax authorities. It might take some effort, but the potential savings can be well worth your time.

2. Exemptions are Your Friends

Whether you're a homeowner, a veteran, a senior citizen, or a farmer, there’s bound to be an exemption that can reduce your tax bill.

3. Stay Informed

The world of property taxes is constantly changing. Stay informed about reassessment cycles, local tax policies, and any new legislation that might impact your tax bill.

The more you know, the better equipped you'll be to minimize your tax burden.

4. Get Organized

Keep thorough records of all your tax-related documents, including your assessment notices, property tax bills, and any correspondence with the tax assessor's office.

Being on top of things helps you stay organized and protects you in case of an audit or dispute.

5. Consider Professional Help

If you're feeling overwhelmed by the complexities of property taxes, don't hesitate to seek professional help. A tax advisor or property tax consultant will help you navigate the system, identify potential savings, and make sure you aren’t leaving money on the table.

Take Control of Your Property Taxes and Ownership Costs

Phew! We've covered a lot of ground here. But here's the biggest takeaway: Property management isn't just about property taxes. It's a juggling act of responsibilities that become overwhelming, even for the most organized property owner.

That's where Ziprent comes in.

We're more than just a property management company. We're your partners in maximizing investment and minimizing stress.

Ready to make your investment work for you? Jump over to our property management services page, and let’s dial this thing up to maximum profitability.