Effective property tax rates vary 7.5x across the US — from 2.02% in New Jersey to 0.27% in Alabama. The dollar bill on a typical home in each state varies 21x: $11,547 in NJ vs. $538 in AL. That gap dominates the cost-of-ownership math for any cross-state housing decision, and most national housing advice doesn't engage with it.
This article ranks effective property tax rates for every state using the same Census ACS data that powers every ZIP page on this site, then explains why a low rate doesn't always mean a low bill — and which states have made the deliberate "high property tax instead of state income tax" trade-off.
The 12 highest-tax states
Ranked by median effective property tax rate across all ZIPs in the state (Census ACS, current release):
| Rank | State | Effective rate | Median home | Annual tax on median |
|---|---|---|---|---|
| 1 | New Jersey | 2.02% | $571,978 | $11,547 |
| 2 | Illinois | 1.70% | $191,273 | $3,244 |
| 3 | New York | 1.69% | $318,777 | $5,402 |
| 4 | Connecticut | 1.63% | $436,396 | $7,116 |
| 5 | New Hampshire | 1.59% | $477,498 | $7,579 |
| 6 | Vermont | 1.51% | $348,803 | $5,251 |
| 7 | Kansas | 1.25% | $173,117 | $2,156 |
| 8 | Texas | 1.19% | $261,765 | $3,109 |
| 9 | Wisconsin | 1.18% | $305,075 | $3,606 |
| 10 | Nebraska | 1.17% | $230,410 | $2,707 |
| 11 | Rhode Island | 1.15% | $516,585 | $5,943 |
| 12 | Pennsylvania | 1.14% | $234,627 | $2,681 |
New Jersey at 2.02% is in a category by itself — one of only two states above 1.7%, and the combination of high rate plus high home values produces the steepest property tax bills in the country by a meaningful margin. The Northeast dominates the top 6, joined by New Hampshire (which trades the lack of an income tax for one of the highest property tax rates anywhere) and Vermont.
The 10 lowest-tax states
Ranked by lowest effective rate (excluding Puerto Rico, which doesn't follow mainland tax structure):
| Rank | State | Effective rate | Median home | Annual tax on median |
|---|---|---|---|---|
| 1 | Alabama | 0.27% | $196,107 | $538 |
| 2 | Hawaii | 0.30% | $835,236 | $2,474 |
| 3 | Louisiana | 0.36% | $183,678 | $664 |
| 4 | Colorado | 0.43% | $501,221 | $2,141 |
| 5 | Delaware | 0.43% | $380,446 | $1,626 |
| 6 | Idaho | 0.44% | $430,974 | $1,893 |
| 7 | Tennessee | 0.45% | $267,604 | $1,193 |
| 8 | New Mexico | 0.45% | $284,326 | $1,282 |
| 9 | West Virginia | 0.47% | $146,362 | $681 |
| 10 | Arizona | 0.47% | $388,246 | $1,810 |
Alabama at 0.27% is the lowest on the mainland — a $200K home there generates $538/year in property tax, less than many residents of New Jersey pay in a single month. Louisiana and West Virginia are similar stories: low rates plus low home values produce small absolute bills. The states where the low rate matters most for affordability are the ones where it's paired with low home values.
The pattern is different in Hawaii (0.30% rate, $2,474 typical bill) and Colorado (0.43%, $2,141): the rate is technically low but home values are high enough to produce a noticeable bill. Calling these "low-tax states" without that context is misleading.
What's actually driving these rankings
Three patterns the data reveals:
- The "no income tax" trade-off. Texas (1.19%) and New Hampshire (1.59%) make the deliberate decision to have no state income tax in exchange for high property tax. The total state-and-local burden looks similar to higher-income-tax states; it's just collected through property instead. For high-income earners this is favorable (income gets taxed federal-only, property gets the same hit as everywhere else). For retirees on fixed incomes, it's the opposite — property tax doesn't drop when your earnings do. Florida, Nevada, and Wyoming use similar mechanics with lower property tax rates but offsetting sales tax structures.
- The Northeast cluster. New Jersey, Illinois, New York, Connecticut, New Hampshire, Vermont, Rhode Island all rank in the top 11. These are mature states with large per-capita pension and infrastructure obligations and historically extensive public-school systems. The high property tax is the math result of long-running funding commitments. Reform proposals come up annually; structural change is rare.
- The South + Mountain West low-tax cluster. Alabama, Louisiana, Tennessee, West Virginia, Arizona, New Mexico, Idaho all sit at the bottom of the rate ranking. These states historically funded local government through other channels (energy royalties in NM, gambling and sales tax in NV, tourism in TN). The trade-off is generally lower per-capita public investment in schools and infrastructure — which is the real cost of "low property tax" that doesn't show up on a comparison chart.
What we'd actually do with this data
The opinionated reading — the part the numbers alone don't tell you:
- Compare the bill, not the rate, for cost-of-ownership decisions. A 0.5% rate on a $700K home ($3,500/yr) costs more than a 1.5% rate on a $200K home ($3,000/yr). For someone moving from coastal California to inland Texas, the property tax math depends almost entirely on what they buy in Texas, not on the state rate alone.
- Include the full state-and-local burden when comparing across states. Property tax is one component. State income tax, sales tax, vehicle registration, school district fees, and special assessments (water, sewer, mosquito districts in some states) all matter. A "low-property-tax state" with high sales tax and 6% income tax may be more expensive than a "high-property-tax state" with no income tax.
- For investors: factor effective rate into yield calculations from the start. A property in Austin's 78704 (1.8% effective tax rate) and one in Birmingham's 35216 (around 0.45%) have completely different cap-rate math. Pro-formas that assume a national-average tax rate consistently understate the carry cost in TX, IL, NJ, NY, NH, and CT. The cap rate calculator takes the local rate as an input — use it, don't assume a default.
- For retirees on fixed income: think about the trajectory. Property tax rises with assessments; income tax doesn't apply once you stop earning. The math that makes Texas attractive in your 40s — no income tax, modest property tax bill on your current home — flips when you're 70 and your property has appreciated 80% but your income has dropped. Several "low income tax" retirement states (TX, NH, WA) have meaningful property tax rates that punish long-term homeowners through assessment growth.
The verdict for most readers: don't shop for "low property tax" as an abstract good. Shop for the combination of property tax rate, home value, income tax, and other living costs that fits your specific situation — and run the math on a specific home, not on a state-level abstraction. The state-level data on this page is for framing the comparison, not making it.
Methodology
For transparency:
- Effective property tax rate: median across all ZIPs in each state. Each ZIP's effective rate is calculated as median annual property tax divided by median home value at the ZIP level, both from Census American Community Survey 5-year estimates (most recent release).
- Median home value: median across all ZIPs in each state, also from ACS.
- State coverage: ZIPs with at least 100 owner-occupied housing units. ZIPs with fewer than 20 such ZIPs in their state are excluded from the state aggregate to avoid noise.
- Annual tax on median: median home value × median effective rate. A representative figure for "typical owner," not a national average or a luxury-tier extrapolation.
29,261 ZIPs across 50 states + DC contribute to these aggregates. We refresh annually when ACS releases new estimates.
Frequently asked
Which state has the lowest property tax? Alabama at 0.27% effective rate. The typical Alabama home generates $538/year in property tax — among the lowest absolute bills in the US because both the rate AND the home value are low. Louisiana (0.36%) and West Virginia (0.47%) are similar profiles. Hawaii has the third-lowest rate (0.30%) but high home values mean the typical bill is much higher ($2,474/year).
Which state has the highest property tax? New Jersey at 2.02% effective rate. The combination of high rate and high home values produces the steepest typical bill in the US at $11,547/year. Illinois (1.70%) is second by rate; New York (1.69%), Connecticut (1.63%), and New Hampshire (1.59%) round out the top 5.
Does Texas really have high property taxes? Yes — Texas ranks 8th highest at 1.19% effective rate. The typical Texas home generates $3,109/year in property tax. This is the result of the state's no-income-tax structure: the funding has to come from somewhere, and property tax bears most of it. For high-income earners moving from California, the savings on state income tax usually more than offsets the higher property tax. For retirees on fixed income, the math doesn't work as well.
Why are the rates I see on Zillow or Redfin different? A few reasons. Different data sources use different methodology — some report mill rates (a per-thousand-dollars assessed value figure), some report effective rates, some report nominal rates that don't account for homestead exemptions or assessment caps. Some pull from county tax assessors directly; some interpolate from ACS data. Our numbers use ACS uniformly so the rates are directly comparable across states; for any specific property, always verify with the actual county assessor.
Next steps
For per-property tax math at the ZIP level, every ZIP page on this site shows the local effective rate and median bill. For a buy-vs-rent comparison that incorporates property tax into the full cost-of-ownership calculation, see buy vs rent: when each makes sense — the calculator takes the tax rate as an explicit input. To see how property tax interacts with rental yield for investors, the cap rate explainer walks through the full expense subtraction.
Data: Census ACS 5-year estimates (current release), ZIP-level. State medians computed across all ZIPs with at least 100 owner-occupied housing units. Refreshed annually with each ACS release. See methodology for the full per-source description.