Real-Estate Property Taxes By State

Posted by Damon L. Chavez on Tuesday, August 8th, 2017 at 8:45am.

July 27, 2017 / Homes.com, By Steve Cook

What states have the lowest property taxes?

Property taxes are one of the annual expenses that some buyers may not include in their calculations of the total cost of owning a primary residence or vacation home. However, they are a substantial expense and they can vary by several thousand dollars a year depending on your state or local jurisdiction.

The amount of property tax owed depends on the appraised fair market value of the property, as determined by the property tax assessor. Appraisals are conducted annually and reflect changing home values. Property tax liability is calculated by multiplying the nominal property tax rate by the assessment ratio (the percentage of the value of the property that is taxed) by the value of the property. Property taxes are levied by counties, cities, or special tax districts on most types of real estate- including homes, businesses, and parcels of land.

Higher property taxes are not necessarily a bad thing, especially if you are looking for a community with good schools. School funding comes from a combination of three sources: about 45 percent of school funding comes from local money (primarily property taxes), 45 percent from the state and 10 percent federal. In every state, though, inequity between wealthier and poorer districts continues to exist. That’s often because education is paid for with the amount of money available in a district. Thus, students in higher-income towns with higher home values tend to have easy access to guidance counselors, school psychologists, personal laptops, and up-to-date textbooks, while those in high-poverty areas don’t.

Like most taxes, property taxes are more likely to rise than fall. Even though they receive annual assessments and tax bill, many homeowners may not pay close attention to tax increases because they choose to pay taxes through an escrow account managed by their mortgage servicer. Homeowners who pay taxes and homeowners insurance through an escrow account receive a single monthly bill that includes their mortgage and escrow payments, which spread the cost of property taxes over a six or 12-month period.

Below is a ranking of states from Wallethub based on the effective real estate property tax rates in 2017. Using $179,000 as a median home value, the table provides a general idea of what annual property taxes will be in each state.

However, effective property tax rates differ widely across and within states, making them difficult to compare. In addition to variation in statutory tax rates, local governments use various methods to calculate their real property tax base. The Smart Assetwebsite provides a property tax calculator that you can use to find local property tax rates by ZIP Codes and get an estimate of annual property taxes based on assessed valuation of a home.

Real-Estate Property Taxes by State

Rank State Effective Real-Estate 
Tax Rate  
Annual Taxes on a 
$179K Home*
State Median 
Home Value
Annual Taxes on Home at 
State Median Value
1 Hawaii 0.27% $487 $515,300 $1,406
2 Alabama 0.43% $773 $125,500 $543
3 Louisiana 0.49% $876 $144,100 $707
4 Delaware 0.54% $959 $231,500 $1,243
5 District of Columbia   0.56% $1,000 $475,800 $2,665
6 South Carolina 0.57% $1,019 $139,900 $798
7 West Virginia 0.58% $1,044 $103,800 $607
8 Colorado 0.60% $1,073 $247,800 $1,489
9 Wyoming 0.61% $1,097 $194,800 $1,196
10 Arkansas 0.62% $1,111 $111,400 $693
11 Utah 0.68% $1,218 $215,900 $1,472
12 New Mexico 0.74% $1,324 $160,300 $1,188
13 Tennessee 0.75% $1,335 $142,100 $1,062
14 Idaho 0.76% $1,366 $162,900 $1,246
15 Mississippi 0.79% $1,408 $103,100 $813
16 Virginia 0.80% $1,420 $245,000 $1,948
17 (tie)   California 0.81% $1,438 $385,500 $3,104
17 (tie) Arizona 0.81% $1,446 $167,500 $1,356
19 (tie) Montana 0.85% $1,525 $193,500 $1,652
19 (tie) Kentucky 0.85% $1,511 $123,200 $1,042
19 (tie) North Carolina 0.85% $1,524 $154,900 $1,322
19 (tie) Nevada 0.85% $1,523 $173,700 $1,481
23 Indiana 0.87% $1,560 $124,200 $1,085
24 Oklahoma 0.88% $1,569 $117,900 $1,036
25 Georgia 0.94% $1,685 $148,100 $1,397
26 Missouri 1.00% $1,790 $138,400 $1,387
27 Florida 1.06% $1,894 $159,000 $1,686
28 (tie)     Oregon 1.08% $1,929 $237,300 $2,563
28 (tie) Washington 1.08% $1,931 $259,500 $2,805
30 Maryland 1.10% $1,956 $286,900 $3,142
31 North Dakota 1.12% $2,000 $153,800 $1,722
32 (tie) Alaska 1.18% $2,112 $250,000 $2,956
32 (tie) Minnesota 1.18% $2,110 $186,200 $2,200
34 Massachusetts 1.20% $2,139 $333,100 $3,989
35 Maine 1.30% $2,321 $173,800 $2,259
36 South Dakota 1.34% $2,389 $140,500 $1,879
37 Kansas 1.40% $2,502 $132,000 $1,849
38 Iowa 1.48% $2,649 $129,200 $1,916
39 Pennsylvania 1.53% $2,725 $166,000 $2,533
40 Ohio 1.56% $2,794 $129,900 $2,032
41 New York 1.62% $2,899 $283,400 $4,600
42 Rhode Island 1.63% $2,915 $238,000 $3,884
43 Vermont 1.74% $3,116 $217,500 $3,795
44 Michigan 1.78% $3,172 $122,400 $2,174
45 Nebraska 1.85% $3,308 $133,200 $2,467
46 Texas 1.90% $3,386 $136,000 $2,578
47 Wisconsin 1.96% $3,499 $165,800 $3,248
48 Connecticut 1.97% $3,517 $270,500 $5,327
49 New Hampshire 2.15% $3,838 $237,300 $5,100
50 Illinois 2.30% $4,105 $173,800 $3,995
51 New Jersey 2.35% $4,189 $315,900 $7,410

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