Property Tax by State, and What It Costs on a Real Home
The same house costs eight times more in property tax in New Jersey than in Alabama.
Follow Mortgages & Home
Ruth Ballinger Editor, small business and lendingRuth covers business formation and borrowing, from LLC filing fees to mortgages, auto loans and student debt.
Effective property tax rates range from 0.28% of home value in Alabama and Hawaii to 2.14% in New Jersey. On a $400,000 home that is the difference between about $1,120 and $8,560 a year. Rates are set locally, so your county matters as much as your state.
The short version
- Effective property tax rates range from 0.28% of home value in Alabama and Hawaii to 2.14% in New Jersey, a spread of more than seven to one.
- On a $400,000 home that is the difference between $1,120 and $8,560 a year, or $93.33 and $713.33 a month inside a mortgage payment.
- Property tax is calculated as assessed value times a local millage rate, not as a percentage of the price you paid, which is why identical homes can carry different bills.
- New Hampshire has the second-highest effective rate at 2.11% because it levies neither an income tax nor a sales tax.
- Effective rates are statewide averages; county and school district levies within a state vary widely, so use the rate for your specific address.
Key figures · 2024
- Highest (New Jersey)
- 2.14%
- Tax Foundation
- Lowest (Alabama, Hawaii)
- 0.28%
- Tax Foundation
- On a $400k home, NJ
- $8,560/yr
- Calculated
- On a $400k home, AL
- $1,120/yr
- Calculated
Contents
Which states have the highest property tax?
Effective rate on owner-occupied housing:
| State | Effective rate | On a $400,000 home |
|---|---|---|
| New Jersey | 2.14% | $8,560 |
| New Hampshire | 2.11% | $8,440 |
| Vermont | 1.90% | $7,600 |
| Illinois | 1.79% | $7,160 |
| New York | 1.77% | $7,080 |
| Texas | 1.71% | $6,840 |
Which states have the lowest?
| State | Effective rate | On a $400,000 home |
|---|---|---|
| Alabama | 0.28% | $1,120 |
| Hawaii | 0.28% | $1,120 |
| Colorado | 0.41% | $1,640 |
| Louisiana | 0.41% | $1,640 |
| Idaho | 0.45% | $1,800 |
Hawaii is the instructive case. Its rate is among the lowest in the country, but its home values are the highest, so the bill is not small.
Why do no-income-tax states appear near the top?
Because the money has to come from somewhere. Texas and New Hampshire both levy no income tax and both sit in the top six for property tax. New Hampshire also has no sales tax, which leaves property as almost the only lever it has.
Is this the rate my county charges?
No. Property tax is set locally (by counties, municipalities and school districts), so the rate on your bill can differ substantially from the state average. These figures are effective rates: total tax paid divided by total home value, which captures assessment practices as well as headline rates.
What is a homestead exemption?
A reduction in the assessed value of a home you live in, which lowers the tax owed. Most states offer one, and the terms vary widely. Some are automatic; many require an application, and missing it is a common and expensive oversight.
Frequently asked questions
Which state has the highest property tax?
New Jersey, at an effective rate of 2.14% of home value.
Which states have the lowest?
Alabama and Hawaii, both at 0.28%. Hawaii's high home values mean the bill is still substantial.
Why is Texas property tax so high?
Texas levies no income tax, so property and sales tax carry more of the burden. Its effective rate is 1.71%.
Is the rate the same across a state?
No. Property tax is set by counties, cities and school districts, so it varies considerably within a state.
What is an effective property tax rate?
Total property tax paid divided by total home value. It reflects assessment practice as well as the nominal rate.
Can I lower my property tax?
Claim any homestead exemption you qualify for, and appeal the assessment if comparable homes are assessed lower.
Sources
Every figure on this page is attributed to a named source with the date it took effect. Our reviewers check them against the primary source before publication.
About our expert
Editor, small business and lending
Experience
Ruth edits the business, loans and mortgage desks: LLC formation and annual fees by state, payroll and business banking, and the borrowing side from mortgages and auto loans through to student loan repayment.
Filing fees and repayment programmes are set by fifty-one different authorities and change without announcement, so her pages carry the state and the effective date on the figure itself rather than a national average that is true nowhere.
Areas of expertise
- LLC formation
- Business banking
- Mortgages
- Student loans
Comments
No comments yet. Be the first to add one.