Understanding property taxes is essential for homeowners, buyers, and investors alike. Property tax rates vary significantly from state to state and even within local jurisdictions. These taxes are often used to fund local services like schools, infrastructure, and emergency services, so knowing what to expect can help you budget more effectively.

Read on to see the states with the highest and lowest property taxes in 2026 and learn more about how property taxes are assessed in various regions.

Property Taxes By State

Property tax rates vary significantly across the United States, with some states offering lower rates to attract homeowners and businesses while others impose higher taxes to fund public services. Below is a property tax table by state to help you understand how much you might pay depending on where you live or plan to buy property. This guide covers effective rates for owner-occupied homes in all 50 states, plus a separate table showing where investment properties are taxed at higher rates.


StateEffective Tax RateRank
StateNew JerseyEffective Tax Rate1.88%Rank1
StateIllinoisEffective Tax Rate1.88%Rank2
StateConnecticutEffective Tax Rate1.54%Rank3
StateVermontEffective Tax Rate1.51%Rank4
StateNew HampshireEffective Tax Rate1.50%Rank5
StateNebraskaEffective Tax Rate1.44%Rank6
StateTexasEffective Tax Rate1.40%Rank7
StateOhioEffective Tax Rate1.36%Rank8
StateIowaEffective Tax Rate1.33%Rank9
StateWisconsinEffective Tax Rate1.32%Rank10
StateNew YorkEffective Tax Rate1.30%Rank11
StatePennsylvaniaEffective Tax Rate1.26%Rank12
StateKansasEffective Tax Rate1.21%Rank13
StateMichiganEffective Tax Rate1.19%Rank14
StateRhode IslandEffective Tax Rate1.12%Rank15
StateMassachusettsEffective Tax Rate1.00%Rank16
StateMinnesotaEffective Tax Rate1.00%Rank17
StateSouth DakotaEffective Tax Rate1.00%Rank18
StateMaineEffective Tax Rate0.98%Rank19
StateAlaskaEffective Tax Rate0.94%Rank20
StateMarylandEffective Tax Rate0.92%Rank21
StateNorth DakotaEffective Tax Rate0.92%Rank22
StateMissouriEffective Tax Rate0.89%Rank23
StateOregonEffective Tax Rate0.81%Rank24
StateGeorgiaEffective Tax Rate0.79%Rank25
StateOklahomaEffective Tax Rate0.79%Rank26
StateFloridaEffective Tax Rate0.78%Rank27
StateVirginiaEffective Tax Rate0.78%Rank28
StateIndianaEffective Tax Rate0.76%Rank29
StateWashingtonEffective Tax Rate0.75%Rank30
StateKentuckyEffective Tax Rate0.74%Rank31
StateCaliforniaEffective Tax Rate0.70%Rank32
StateNorth CarolinaEffective Tax Rate0.66%Rank33
StateNew MexicoEffective Tax Rate0.63%Rank34
StateMontanaEffective Tax Rate0.61%Rank35
StateDistrict of ColumbiaEffective Tax Rate0.60%Rank36
StateMississippiEffective Tax Rate0.58%Rank37
StateArkansasEffective Tax Rate0.56%Rank38
StateLouisianaEffective Tax Rate0.55%Rank39
StateDelawareEffective Tax Rate0.54%Rank40
StateWyomingEffective Tax Rate0.53%Rank41
StateTennesseeEffective Tax Rate0.52%Rank42
StateWest VirginiaEffective Tax Rate0.51%Rank43
StateNevadaEffective Tax Rate0.50%Rank44
StateColoradoEffective Tax Rate0.50%Rank45
StateIdahoEffective Tax Rate0.50%Rank46
StateSouth CarolinaEffective Tax Rate0.49%Rank47
StateArizonaEffective Tax Rate0.48%Rank48
StateUtahEffective Tax Rate0.48%Rank49
StateAlabamaEffective Tax Rate0.37%Rank50
StateHawaiiEffective Tax Rate0.29%Rank51

Buying a rental? Investment properties are taxed at higher rates in 19 states. See investment property tax rates by state below.

How Do Property Taxes Work?

Property taxes are local government fees imposed on real estate, determined by the value of the property you own. These taxes are usually assessed annually and are used to fund local services, like public schools, roads, police, fire departments, or other community needs.

The amount you pay is determined by multiplying the assessed value of your property by the local tax rate, also known as the mill rate. Generally, the assessed value is set by the county or municipal tax assessor. It can vary depending on factors like property size, location, and improvements made to the property.

Property taxes can often increase or decrease based on changes in the real estate market or updates to local tax laws. Homeowners may also be eligible for certain exemptions or deductions, like homestead exemptions, which can lower the taxable value of their property.

Additionally, property taxes are an important consideration for those exploring the tax benefits of real estate investing, as they can impact investment returns and cash flow. Understanding how property taxes work in your area allows you to better plan for future costs and make informed decisions about your real estate investments.

How Are Property Taxes Determined?

Property taxes are calculated based on three key factors: 

  1. The state tax rate
  2. The assessment ratio
  3. The property’s assessed value

Local and state governments set the state tax rate, which varies widely depending on the area. Some states have higher rates to fund public services, while others keep property taxes low to attract residents and businesses.

3 key factors that determine property taxes

The assessment ratio determines what portion of a property’s value is subject to taxation. While some states tax 100% of a property’s assessed value, others only tax a percentage. Local tax assessors evaluate properties periodically to determine their assessed value based on factors like market conditions, property size, location, and improvements. If property values rise, taxes may increase accordingly, even if the tax rate stays the same.

Understanding property tax assessments is crucial for homeowners and investors, especially when considering potential tax liabilities such as the capital gains tax on real estate when selling a property. Knowing how property values are assessed and taxed helps property owners plan for costs and explore potential exemptions or deductions that may reduce their tax burden.

States With the Highest Property Taxes

Below are the top three states with the highest property tax rates in the US, along with their average home values and estimated annual property taxes:

  • New Jersey
    • Effective property tax rate: 1.88%
    • Average home value: $558,900
    • Average annual property tax: Approximately $10,500

New Jersey consistently ranks top for property tax rates, resulting in substantial annual tax bills for homeowners. While these taxes fund essential local services, they significantly impact the overall cost of homeownership.

  • Illinois
    • Effective property tax rate: 1.88%
    • Average home value: $281,547
    • Average annual property tax: Approximately $5,290

Illinois homeowners face high property tax rates, which contribute to public education funding and local government services. The combination of elevated tax rates and moderate home values creates a significant tax burden for residents.

  • Connecticut
    • Effective property tax rate: 1.54%
    • Average home value: $425,333
    • Average annual property tax: Approximately $6,550

Connecticut’s property tax rates are among the highest in the nation, leading to considerable annual expenses for homeowners. These taxes are a primary funding source for municipal services and public schools.

For homeowners in these states, the high property tax rates underscore the importance of exploring potential tax relief options. One such option is the property tax deduction, which allows taxpayers to deduct state and local property taxes from their federal taxable income, potentially reducing their overall tax liability. Consulting with a tax professional can help determine your eligibility and maximize available deductions.

States With the Lowest Property Taxes

Property tax rates vary significantly across the United States, with some states offering notably lower rates. These states are often considered tax haven states, attracting homeowners seeking to minimize their tax burden. Below are the top three states with the lowest property tax rates, along with their average home values and estimated annual property taxes:

  • Hawaii
    • Effective property tax rate: 0.29%
    • Average home value: $823,970
    • Average annual property tax: Approximately $2,390

Despite having the lowest property tax rate in the nation, Hawaii’s high average home values result in moderate annual property tax payments. This combination makes Hawaii appealing to those seeking a tax haven, though the overall cost of homeownership remains influenced by property values.

  • Alabama
    • Effective property tax rate: 0.37%
    • Average home value: $232,106
    • Average annual property tax: Approximately $858

Alabama’s combination of low property tax rates and affordable home prices leads to some of the lowest property tax bills in the nation. This affordability contributes to its reputation as a tax haven state, attracting homeowners looking for lower overall housing costs.

  • Arizona
    • Effective property tax rate: 0.48%
    • Average home value: $420,906
    • Average annual property tax: Approximately $2,020

Arizona offers low property tax rates along with modest home prices. Home values in Arizona have remained relatively stable over the last few years, although the average home value fell slightly between the beginning of 2025 and 2026.

A blue sticky note with “Property Tax” written on it beside a green sticky note with a house drawn on it sitting near stacks of hundred dollar bills.

Investment Property Tax Rates by State

Most states apply the same tax rate to every home, but that does not mean investors pay the same bill. In 18 states plus Washington, D.C., investment properties carry a higher effective tax rate than owner-occupied homes, and in four more states (Illinois, Massachusetts, New York, and Rhode Island, all uniform at the state level) the premium is set by a specific city or county, shown as their own rows below. The gap almost never shows up as a separate “investor rate.” Instead, it comes from a higher assessment ratio on non-owner-occupied property, the loss of a homestead exemption or credit, or the loss of a cap that limits how fast a homeowner’s assessed value can grow.

The table below translates each jurisdiction’s rules into a single estimated effective tax rate for a median-priced single-family investment property held as a long-term rental, calculated on the same basis as the owner-occupied rates in the table above and ranked from the highest investor rate to the lowest. If you are underwriting a rental purchase, use the investment property rate, not the headline rate. In any state not listed here, investment property is taxed at the same effective rate as a primary residence.

State / Jurisdiction Effective Owner-Occupied Rate Effective Investment Property Rate ▼ Notes
IL – Cook County ~1.90% ~2.10% Illinois is uniform statewide (1.88%); Cook County’s $10K EAV homestead exemption goes to owner-occupants only
Michigan 1.19% ~2.09% Non-homestead property pays up to 18 additional school operating mills
Texas 1.40% ~1.90% No $140K homestead exemption or 10% appraisal cap; 20% non-homestead cap expires after 2026
Vermont 1.51% ~1.81% Non-homestead education tax rate
RI – Providence ~1.05% ~1.75% Rhode Island is uniform statewide (1.12%); Providence publishes a separate, higher rate for non-owner-occupied residential
Indiana 0.76% ~1.50% No homestead deductions; rentals capped at 2% of assessed value vs 1%
South Carolina 0.49% ~1.34% 6% assessment vs 4%, plus school operating millage owner-occupants are exempt from
MA – Boston & 15+ cities ~0.65% ~1.16% Massachusetts is uniform statewide (1.00%); Boston’s residential exemption (up to 35% of average value) goes to owner-occupants only
HI – Hawaii County (Big Island) ~0.58% ~1.15% Non-owner-occupied residential tiers roughly 2x–3x the homeowner rate
NY – New York City (condos & co-ops) ~0.85% ~1.05% New York is uniform statewide (1.30%); the 17.5%–28.1% co-op/condo abatement applies to primary residences only
Minnesota 1.00% ~1.05% No market value exclusion; 4+ unit buildings closer to 1.25%
Florida 0.78% ~1.02% No $50K homestead exemption or 3% Save Our Homes cap; 10% assessment cap instead
North Dakota 0.92%* 0.92%* Same rate, but no Primary Residence Credit of up to $1,600 for investors
Mississippi 0.58% ~0.89% Class II assessed at 15% vs 10% for Class I
Washington, D.C. 0.60% 0.85% No $91,950 homestead deduction or 10% assessment cap
Louisiana 0.55% ~0.82% No $75K homestead exemption
Alabama 0.37% ~0.74% Class II assessed at 20% vs 10% for Class III
HI – Maui County ~0.17% ~0.70% Non-owner-occupied tiers on a median home; short-term rentals run ~1.30%–1.70%
Idaho 0.50% ~0.68% No homeowner’s exemption (50% of value up to $125K)
Montana 0.61% 0.61% Long-term rentals (28-day+ leases, 7+ months/yr) keep homestead rates; second homes & STRs ~1.20%
Arizona 0.48% ~0.56% Class 4 rentals not eligible for the Homeowner Rebate on school taxes
Hawaii (statewide) 0.29% ~0.55% Population-weighted average across county classifications; see county rows
HI – Kauai County 0.26% ~0.55% Non-owner-occupied tiers on a median home; vacation rentals higher
HI – Honolulu County 0.35% ~0.50% Residential A blended on a median home: 0.40% on first $1M, 1.14% above
Nevada 0.50%* 0.50%* Same rate, but increases capped at up to 8%/yr vs 3%/yr for primary residences
Utah 0.48% 0.48% Long-term rentals keep the 45% exemption; second homes & STRs taxed on 100% of value (~0.87%)

Methodology: Owner-occupied effective tax rates are the statewide figures shown in the 50-state table above (median taxes paid as a percentage of median owner-occupied home value). Investment property rates are modeled from those baselines by applying each state’s statutory treatment of non-owner-occupied residential property as of the 2026 tax year: assessment ratio classifications (AL, MS, SC, UT, MT), homestead exemptions, deductions, and credits (AZ, FL, ID, IN, LA, MI, MN, ND, TX, VT, D.C.), and assessment growth caps (FL, NV, TX). The canonical scenario is a median-priced single-family investment property held as a long-term rental; where short-term rentals or second homes are taxed differently (UT, MT), those rates appear in the notes. Where rates are tiered by value or the differential comes from a flat-dollar exemption or percentage-of-bill abatement (Hawaii counties, Cook County, Boston, New York City, Providence), the effective rate is computed by applying published local rates, tiers, exemptions, or abatements to the jurisdiction’s approximate 2026 median single-family value. Where owner-occupants are exempt from specific millage (South Carolina school operating taxes, Michigan’s 18 non-homestead school operating mills), the investor rate reflects the full levy. Hawaii county rates are published rates per $1,000 of assessed value for the fiscal year beginning July 1, expressed as percentages, and reset annually. ~ denotes a modeled estimate; actual rates vary by county, municipality, school district, and property value. * denotes the same base rate for all residential property, with the differential arising from a credit or an assessment growth cap. Illinois, Massachusetts, New York, and Rhode Island are uniform at the state level and appear only through the local jurisdictions that set their own differentials. Reflects statutory changes through July 2026, including Indiana SEA 1 (2025), Montana’s 2025 property tax reform, the Texas $140,000 homestead exemption effective tax year 2026, and North Dakota’s expanded Primary Residence Credit. Figures are estimates for comparison purposes and are not tax advice; confirm rates with the county assessor before closing. Click any column header to sort; default order is investment property rate, highest to lowest.


~ Modeled estimate for a median-priced single-family investment property. * Same base rate; the differential comes from a credit or an assessment growth cap. Ranked by investment property rate, highest to lowest. Full methodology below.

Why Investors Pay More in These States

The biggest gaps come from assessment ratio classes, where the state taxes a larger share of an investment property’s value by law. South Carolina assesses investment property at 6% of market value instead of 4% and also charges investors the school operating millage that owner-occupants are exempt from, which is why the investor rate runs roughly 2.7 times the owner-occupied figure, the largest gap in the country. Alabama assesses investment property at 20% instead of 10%, roughly doubling the bill. Mississippi assesses it at 15% instead of 10%. Utah taxes second homes and short-term rentals on 100% of market value while primary residences are taxed on only 55%, though long-term rentals that serve as a tenant’s primary residence keep the exemption and pay the owner-occupied rate. Montana works the same way after its 2025 reform: long-term rentals leased for 28 days or more at a time for at least 7 months of the year qualify for the graduated homestead rates, while second homes and short-term rentals are assessed at a flat 1.9% rate.

The second group taxes investors more by withholding a homestead exemption or deduction. Michigan’s Principal Residence Exemption waives up to 18 mills of school operating tax, so non-homestead rentals pay roughly 0.90 percentage points more on market value, one of the steepest homestead penalties anywhere. Indiana’s homestead deductions shield about half of a median home’s value ($40,000 standard for the 2026 assessment date plus a 40% supplemental deduction), and rentals get none of them, though rental taxes are capped at 2% of assessed value. Texas investors get no $140,000 school district homestead exemption and no 10% appraisal cap, and the temporary 20% appraisal cap on non-homestead property under roughly $5.3 million expires after tax year 2026. Florida investors lose the $50,000 homestead exemption and the Save Our Homes 3% assessment cap, so investment property is taxed at full millage on market value. Louisiana’s $75,000 homestead exemption shields roughly a third of a median-priced home. Idaho’s homeowner’s exemption shields 50% of value up to $125,000. Washington, D.C. investors pay the full statutory rate of $0.85 per $100 with no homestead deduction ($91,950 for tax year 2026) and no 10% assessment cap. Vermont rentals pay the statewide non-homestead education tax rate, which runs above the homestead rate and offers no income sensitivity. Arizona rentals fall into Class 4, which is not eligible for the state Homeowner Rebate on school taxes and must be registered with the county assessor. Minnesota’s non-homestead residential loses the market value exclusion, a small premium on single-family rentals, and apartment buildings of four or more units carry a higher class rate closer to 1.25%.

Two states share the same base rate but treat investors differently over time, marked with an asterisk in the table. North Dakota owner-occupants receive a Primary Residence Credit of up to $1,600 that investors do not, worth roughly half a percentage point on a median-priced home. Nevada caps annual tax increases at 3% on a primary residence but up to 8% on investment property, so the same starting rate grows more than twice as fast, though rentals at or below fair market rent can qualify for the 3% cap.

In Hawaii, Illinois, Massachusetts, New York, and Rhode Island, the premium is set locally. Hawaii’s four counties each maintain separate classifications: on Oahu, non-owner-occupied homes assessed at $1 million or more fall into Residential A, taxed at 0.40% on the first $1 million and 1.14% on everything above it, which blends to roughly 0.50% on a median-priced home; Maui’s non-owner-occupied tiers blend to roughly 0.70% on a median home against owner-occupied rates as low as 0.17%, with short-term rentals running 1.30% to 1.70%; Kauai and the Big Island tax non-owner-occupied residential at roughly two to three times their homestead rates. Cook County’s General Homestead Exemption removes $10,000 of equalized assessed value for owner-occupants only, with additional homestead exemptions stacking on top. Boston exempts up to 35% of the average residential value for owner-occupants under Massachusetts’ local-option residential exemption, and Cambridge, Somerville, Brookline, Chelsea, Everett, Malden, Watertown, Waltham, Nantucket, and several other communities have adopted their own versions. In New York City, the co-op and condo abatement, worth 17.5% to 28.1% of the tax bill, applies only when the unit is the owner’s primary residence. Providence taxes non-owner-occupied residential property at a separate, higher published rate, and several other Rhode Island cities use similar homestead structures.

For investors, the practical takeaway is simple. In states like South Carolina, Michigan, Indiana, Alabama, and anywhere in Hawaii, never underwrite a rental using the headline effective rate, because that rate reflects owner-occupied homes. A DSCR calculation built on the owner-occupied rate in these states will overstate cash flow, sometimes by enough to flip a deal from qualifying to not qualifying.

Explore Your Home Buying Options

Understanding how property taxes work is crucial when purchasing a home, and knowing the average property tax by state can help you determine where to buy. Securing the right financing is just as important, and Griffin Funding is here to help. Whether you’re a first-time buyer, a real estate investor, or need flexible lending solutions, we offer various mortgage options tailored to your needs, including non-QM mortgages.

With the Griffin Gold app, you can conveniently manage your mortgage, track payments, and access exclusive benefits—all in one place. If you’re ready to explore your home financing options, get started with Griffin Funding today and find the right loan for your goals.

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Frequently Asked Questions

Are there any states with no property tax?

No, all U.S. states have some form of property tax. However, politicians in some states have proposed eliminating property taxes or phasing them out over time.

It’s important to note that some states with very low property taxes often make up for the lost revenue by charging higher income or sales taxes, so overall tax burden should be considered wherever you choose to buy.

What is the difference between effective property tax rate and the nominal tax rate?

The effective property tax rate reflects what homeowners actually pay as a percentage of their home’s market value, while the nominal rate is the official tax rate applied to assessed value.

In many cases, assessed property values are lower (in some cases much lower) than the true market value of a property. Thus, effective property tax rates provide a more accurate comparison across states.

How often are properties reassessed for tax purposes?

Reassessment frequency varies by location. Some areas reassess annually while others may do so every few years. A property tax reassessment may also be triggered by an action such as a sale, a transfer of property, or the completion of major renovations.

Are property taxes higher on investment properties?

Yes. In 18 states plus Washington, D.C., investment properties carry a higher effective property tax rate than owner-occupied homes, through higher assessment ratios, lost homestead exemptions, or lost assessment caps. The gap can be dramatic: South Carolina investors pay roughly 1.34% versus 0.49% for owner-occupants, about 2.7 times more. See the investment property tax rate table on this page for modeled investor rates in every state where the treatment differs.

Which state has the highest property taxes on investment properties?

Michigan at roughly 2.09% for non-homestead rentals, with Cook County, Illinois the highest single jurisdiction at roughly 2.10%

Can a rental property qualify for a homestead exemption?

Generally no, but Utah and Montana extend primary-residence treatment to qualifying long-term rentals

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 25 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 12 years in business. Follow his updates on LinkedIn.