States With the Lowest Property Taxes

Hawaii has the lowest effective property tax rate in the United States at 0.27%, a fact that catches most people off guard given how expensive Hawaiian real estate is. Your property tax bill depends on two things: the rate and the assessed value, and low-rate states can still hit you hard if home prices are high.

The 10 States With the Lowest Property Tax Rates

Here are the ten states with the lowest effective property tax rates in 2026, ranked from lowest to highest:

• Hawaii — 0.27%
• Alabama — 0.39%
• Colorado — 0.49%
• Louisiana — 0.50%
• South Carolina — 0.52%
• Delaware — 0.55%
• West Virginia — 0.58%
• Nevada — 0.60%
• Wyoming — 0.61%
• Arkansas — 0.62%

For comparison, New Jersey sits at the opposite end with an effective rate of 2.13%, the highest in the country. Illinois comes in at 1.88% and Connecticut at 1.79%. Owning the same $400,000 home in Hawaii costs you roughly $1,080 per year in property taxes. That same home in New Jersey costs $8,520.

Why Hawaii Has a Low Rate But High Bills

Hawaii's 0.27% rate is the lowest of any state, but median home values on the islands exceed $800,000 in many areas. A $800,000 home at 0.27% still produces an annual tax bill of $2,160. Low rates do not automatically mean low bills when home prices are extreme.

Alabama is the better story for total affordability. Its 0.39% rate applies to a median home value around $190,000, which puts the average annual property tax bill under $750. That combination of low rate and low home prices makes Alabama one of the genuinely cheapest states to own property in the country.

States That Also Offer Property Tax Exemptions for Seniors

Several of the lowest-rate states go further by offering senior exemptions that reduce or eliminate property taxes for qualifying homeowners.

Alabama exempts homeowners 65 and older from all state property taxes and offers additional county-level exemptions in most jurisdictions. South Carolina gives residents 65 and older a homestead exemption on the first $50,000 of their home's value. Louisiana offers a homestead exemption of $75,000 for all owner-occupants, with additional relief for seniors meeting income thresholds.

No state fully eliminates property taxes for all residents. Anyone claiming a "0% property tax state" is either describing a very narrow exemption or getting the facts wrong. Every state funds local governments and schools through some form of property taxation.

How to Think About Property Taxes in the Context of Your Total Tax Burden

Property tax rate alone is not enough information to make a sound decision about where to live. You need to weigh it against income taxes, sales taxes, and cost of living together.

Nevada charges no state income tax and keeps property taxes at 0.60%. That combination is genuinely favorable for most working-age homeowners. Wyoming also charges no income tax and sits at 0.61% on property. Compare that to Colorado, which has a low property tax rate of 0.49% but does levy a state income tax at a flat 4.40%.

If you are comparing states purely on income taxes, see our breakdown of States With No Income Tax in 2026 to understand which states eliminate that burden entirely.

The states that make the strongest case for overall tax efficiency tend to be the ones that score well across multiple categories simultaneously, not just one. Wyoming, Nevada, and South Carolina consistently rank well when you run the full numbers.

Use our state tax calculator to input your income, home value, and spending habits to get a personalized total tax burden estimate across any state you are considering.

Key Takeaways

• Hawaii has the lowest effective property tax rate in the country at 0.27%, but high home values mean annual bills can still exceed $2,000 or more depending on location.
• Alabama offers the best combination of low rate (0.39%) and low median home prices, with average annual property tax bills under $750 for most homeowners.
• New Jersey's rate of 2.13% is nearly eight times higher than Hawaii's. On a $400,000 home, that gap costs New Jersey homeowners over $7,400 more per year than their Hawaiian counterparts.

Compare your current state against the lowest property tax states side by side at liveordiehere.com to see exactly how much you could save by moving.