They say there are only two guarantees in life—death and taxes. That's certainly true for property taxes, which are a reality in every state in the U.S. However, some states have lower property taxes than others. Which states have the lowest property taxes in the U.S.?
What does property tax pay for?
Property tax is the amount of money you pay for property that you own. The money collected from property taxes usually stays within your state and local community to help pay for things like education, public transportation, parks and recreation, police and fire departments, and other municipal employees.
The cost of your property taxes depends on how much your property is worth and where it’s located. Besides differing from state to state, property tax rates can differ between cities and municipalities even when they're located within the same state.
Data from the U.S. Census Bureau estimates that the average property tax bill for Americans is $2,471.
According to World Population Review, there are 28 states in the U.S. that have property taxes below 1.00 percent. However, some states with the lowest property tax rates also have high home values, which causes property tax bills to be higher.
For example, Hawaii has the lowest property tax rate in the U.S. at only 0.28 percent. The median home value in Hawaii is $615,300, which equates to a tax bill of about $1,723.
When factoring in the property tax rates and the median home value, five states have the lowest property tax bills.
Alabama has the second-lowest property tax rate in the U.S. at 0.41 percent. However, home values here are a fraction of what they are in Hawaii. For a home at the state’s median value of $142,700, annual property taxes would cost about $585.
In West Virginia, property taxes and home values are some of the lowest in the U.S. The median property value in the state is $119,600. At a tax rate of 0.58 percent, your annual tax bill would be about $693 for a median-valued home.
Arkansas has a 0.62 percent property tax rate. For a median-valued home of $127,800, your property tax bill would be about $792.
Louisiana has both low property taxes and low home values. The property tax rate is 0.55 percent, which means that your annual tax bill would be just over $897 for a home at the state’s median home value of $163,100.
South Carolina is known for its historic districts and coastal regions. The state has a modest property tax rate of 0.57 percent. Although there are million-dollar homes in some areas of the state like Charleston, the median property value throughout the state is $162,300. At that value, your property tax bill would be about $925.
Other states have low property tax rates.
Other states that have property tax rates under 1 percent include Colorado, the District of Columbia, Delaware, and Wyoming. However, these states have higher home values, which has a considerable impact on your overall tax bill.