States with No Property Tax In USA

By: ROS Team

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Property taxes remain the primary source of income for state governments. Tax money funds state-funded education systems, healthcare facilities, transportation infrastructure, and security services.

The property tax you’re assessed depends on where you live. In some states, like Hawaii, the property tax rate is as low as 0.30%.  Other states like New Jersey levy a property tax rate as high as 2.21%.

States without the Property Tax

If you’re looking for states that don’t have property taxes, you might be disappointed to learn that you won’t find one.  States need revenue to operate and deliver basic services, and the money generated from property taxes do just that. There is a silver lining though: some states have lower tax rates than others.

Top 7 States With The Lowest Property Tax:

1- Hawaii

Hawaii is a state that levies the lowest property tax rate in the United States at 0.26%. However, the median home value is higher there.

2- Alabama

After Hawaii, Alabama has the second-lowest property tax rate at 0.40%. Unlike Hawaii, the median home price in Alabama is significantly lower. This makes it one of the most affordable states to live in.

3- Louisiana

Louisiana ranks third in the U.S. for low property taxes.  The effective tax rate in Louisiana is 0.52%, making it one of the most affordable states in the U.S.

4- Wyoming

When it comes to states with low property taxes, Wyoming takes the fourth spot with a property tax rate of 0.55%. However, the flip side is that the median home prices in Wyoming are not as low as that of Alabama.

5- West Virginia

West Virginia is also an ideal place to move to if you are looking for reasonable property tax rates; the state’s tax rate is 0.55%.

6- South Carolina

The property tax rate in South Carolina is 0.56% but the median sales price is quite low which makes it a good choice to move to.

7- Colorado

The effective property tax rate in Colorado is similar to South Carolina, which is 0.56%.  Colorado is not as to live in–the median home prices in the state are higher.

How Property Taxes Are Calculated

Property taxes are customized by the local municipality, but generally, it is calculated by one of the following ways:

How Property Taxes Are Calculated

Property Assessment:

The Property Tax is calculated annually based on one of the following methods:

  • Income

For commercial and business properties, property tax is calculated based on the net rental income the owner would earn by renting out the property. Total costs and other expenses are subtracted before applying the tax assessment.

  • Sales

Property tax is also measured by comparing similar properties that have recently sold in the area. With this method, features of the property are taken into consideration which can influence the value of the property.

  • Cost

In this method, the rebuilding cost of the property is used to calculate the tax. While calculating the property tax, the value of the land or the lot the house sits on plus the depreciation factor into the final rate.

Property Tax Calculation

Once the market value of the property is determined, the tax rate is applied to the market value of the home to calculate the property tax. The tax notice, which documents the assessed property value and tax bill, is sent to the owner.

Property Tax Calculation

Bear in mind that the assessed property value doesn’t translate to the fair market value of the property; the fair market value depends on other factors, particularly market trends or the median home prices in the surrounding area.

Some General Tips to Keep the Tax Low

Let’s be very clear: there is no escape from paying property taxes. However, there are things you can do to keep the tax rate low:

  • Confirm that the lot size, square footage, property upgrades, improvements, and original construction date contained in the notice are accurate.
  • Try to avoid making major structural changes like building a deck or adding on an extra bedroom.  Doing so could potentially increase the tax rate.
  • While you may make the interior more elegant, try to reduce the curb appeal of the home. Unattractive properties are likely to get a poor assessment.
  • Learn what the tax rates your neighbors are paying, especially if they have homes similar to yours.
  • Invite the tax assessor to tour your property. Point out things that may help reduce the market value of the home like older appliances or poor ceilings.


Having said all that, if you are still wondering about state property taxes, let me reiterate that there is no such thing as a state that doesn’t assess a property tax. Property tax is an essential contributor to revenue generation for state governments. However, there are states with lower property taxes than others.