The states with the lowest property taxes in the US – is yours on the list?

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Depending on where you live, the cost of your home can be much more expensive than the price at the “for sale” sign.

The property tax, also known as the real estate tax, can put a heavy burden on your monthly bills in some states, while the tax burden is much less in others.

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Property taxes vary greatly depending on your state and county.

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

and according to home price index of districts, Home prices have risen 20% since the start of 2021, making it even more important for homeowners to find ways to save money on the margins.

For context, New Jersey imposes the highest property tax in the country at 2.49%, and the central state, Florida, imposes a real estate tax at 0.89%.

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

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10. Arkansas

Effective property tax rate: 0.62%
Average Home Value: $169,000
Average property tax payment: $1,048

One of several southern states with low property tax rates, Arkansas also has the third-lowest median home value.

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

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

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

While the value for homeowners is great, Arkansas’ 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%
median home price: $309,000
average property tax payment: $1,885

Wyoming property values ​​are assessed at 9.5% of their market value, which means that Wyomingites only have to pay taxes on one-tenth of the value of their home, making it a very affordable option for homeowners. becomes a state.

Apart from some of the lowest property taxes in the country, Wyoming does not have a state income tax.

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

8. Nevada

effective property tax rate: 0.60%
median home price: $434,000
average property tax payment: $2,604

Nevada to a. is labeled tax haven For the rich and powerful, but some of them also benefit from lower tax laws than the average homeowner.

One of the major contributing factors to Nevada’s low effective tax rate is a reduction law passed in 2005 that prevents the property tax on residential properties from rising more than 3% in a given year.

And while not as lenient as the valuation policy of Wyoming or Arkansas, Nevada only levies taxes against 35% of the home’s value.

7. West Virginia

effective property tax rate: 0.58%
median home price: $129,000
average property tax payment: $748

Property tax rates in different counties vary greatly from state to state, with some homeowners charging far more than others, but West Virginia’s 55 Counties All characteristic effective tax rates are lower than the national average.

And despite the lack of year-over-year growth limits like in Nevada, West Virginia, homeowners should be informed that if the appraised value of their property increases by 10%, or $10,000, in one year, they often need to be under appraisal. It’s time to appeal and trim your taxes. ,

6. South Carolina

effective property tax rate: 0.57%
median home price: $268,000
average property tax payment: $1,528

South Carolina has one of the most homeowner-friendly tax policies in the country, appraising residential homes at only 4% of their appraised value.

With a low sales tax and an annual 15% cap on price increases, South Carolina is an affordable, attractive option for homeowners.

5. Delaware

effective property tax rate: 0.57%
median home price: $334,000
average property tax payment: $1,904

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

Many state governments routinely 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 home value at the time of the most recent assessment.

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

The party is about to end as per the state plan in the coming years new assessments and tax law changes, but until then Delaware – especially Sussex County at 0.34% – claims some of the lowest property taxes in the US

4. Louisiana

effective property tax rate: 0.55%
median home price: $206,000
average property tax payment: $1,133

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

Unfortunately, they also share a lower median income ranking – Louisiana is ranked 47th.

Two major statutes keep the Louisiana rate that low: home value assessed in the state is 10% of market value, and Louisiana homeowners can reduce their taxable value through the homestead exemption of $7,500.

In effect, this means that a $20,000 home is being assessed at $20,000, and the owner is being taxed against $12,500.

3. Colorado

effective property tax rate: 0.51%
average House 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 come largely from taxing the appraised value of a home, which the state has set at 7.15% of the market value, but some people fear that Colorado homeowners will pay after the next round of appraisals. Will have to face sudden tax calculations.

According to Zillow, the average property value in Colorado has risen to $100,000 since March 2021, prompting an addition. 2022 Ballot Amendments Which, like Nevada, would increase the property tax by 3% annually.

2. Alabama

effective property tax rate: 0.41%
median home price: $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 packed with affordable housing.

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

Alabama has the seventh lowest cost of living of any state, which means 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 dependent on imports, Hawaii’s cost of living is nearly twice the national average and one of the highest in the country.

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

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

Bonus: Washington, DC

The nation’s capital sets its property tax rate at 0.56%, which would be the fifth lowest rate if it were a DC state.

Like Hawaii, Washington DC is one of the most expensive places to live in the US, with an average property price of $703,000. zillowSo district residents actually pay some of the most property taxes in real dollars.

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If you are planning to sell your home soon, check out this tip Which could save you thousands on taxes.

Learn more how to set aside a little more money for your mortgage each month. long term profit,

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