States With the Lowest Property Tax Rates, Ranked

Hawaii has the lowest property tax rate in the country, with an effective rate of about 0.29 percent, followed by Alabama at roughly 0.37 percent. After that, Nevada, South Carolina, Utah, Colorado, and Delaware cluster between 0.49 and 0.50 percent, with Wyoming, Louisiana, West Virginia, and Arkansas rounding out the states with the lowest property tax rates at roughly 0.52 to 0.55 percent.¹ The gap between top and bottom is large: the most expensive states charge effective rates five or six times what Hawaii homeowners pay. But the rate alone doesn’t tell you what you’ll owe. Home values, exemptions, and the way each state fills the rest of its budget all shape the actual bill.

What an Effective Property Tax Rate Actually Measures

Every county sets a nominal rate, often expressed in mills (dollars per thousand of assessed value). Assessed value, though, is almost never the same as market value. Local assessors estimate what your home would sell for, then apply an assessment ratio that determines the taxable share. In Alabama, residential property is assessed at just 10 percent of fair market value, so a $200,000 home has a taxable base of only $20,000.² Colorado now uses dual residential assessment rates: 6.8 percent for local government levies and 7.05 percent for school districts.³

Because assessment ratios vary so widely, comparing nominal rates across state lines is meaningless. The effective property tax rate solves that problem by expressing the median tax bill as a percentage of the median home’s full market value. A state with a high nominal rate but a small assessment ratio can end up cheaper than one with a low nominal rate applied to full value. Every figure in this article is an effective rate.

The States Ranked

Hawaii

Hawaii’s effective rate of about 0.29 percent is the lowest in the country by a wide margin.⁴ That sounds almost free until you see the price tags. Median home values in Hawaii are among the highest anywhere, so even a tiny percentage translates to a meaningful dollar bill. Still, a homeowner there pays far less property tax relative to their home’s value than one in most other states. The state can afford to keep property taxes low partly because it collects substantially elsewhere, including a graduated income tax with a top bracket of 11 percent.⁵

Alabama

Alabama’s effective rate falls around 0.37 to 0.38 percent, second-cheapest in the country.¹ Because home values are also modest, the median annual bill is one of the lowest in raw dollar terms too. The 10-percent residential assessment ratio is the main driver: taxable value is a fraction of what the home would actually sell for.² Long-term residents benefit from predictable carrying costs, since both rates and assessed values tend to move slowly.

Nevada, South Carolina, and Utah

These three states cluster around 0.49 percent.⁶ Nevada offers an extra layer of protection for owner-occupants: state law caps annual property tax bill increases at 3 percent for primary residences, regardless of how fast the local market is rising.⁷ That cap has been a lifeline through the boom-and-bust cycles Las Vegas and Reno are known for. South Carolina and Utah reach similar effective rates through their own mix of assessment limits and exemptions.

Colorado and Delaware

Colorado sits at roughly 0.50 percent.¹ Starting in 2025, the state split its residential assessment rate into two tiers, one for local government and a slightly higher one for school districts.³ The practical effect keeps residential owners paying a smaller share than commercial ones. Delaware falls in the same range, with an effective rate that varies significantly by county but places it among the ten cheapest states overall.

Wyoming, Louisiana, West Virginia, and Arkansas

Wyoming and Louisiana both come in around 0.55 percent, while West Virginia and Arkansas sit near 0.52 percent.⁸ Wyoming’s ability to tax mineral and energy extraction means it doesn’t need to lean as hard on residential property owners. Louisiana gets to similar results through a homestead exemption that applies broadly to owner-occupied homes. These four generally round out the bottom ten or twelve in national rankings, depending on the data year.

Why Low Property Taxes Don’t Always Mean Low Total Taxes

No state can simply waive property taxes without replacing the revenue somewhere. The tradeoff usually shows up in sales taxes, income taxes, or natural resource revenue. Nevada and Tennessee charge no state income tax, but their state sales tax rates hit 6.85 percent and 7 percent respectively, before local add-ons push the combined rate higher.⁶⁹ Hawaii takes the opposite approach, collecting relatively little from property but running income tax rates up to 11 percent for high earners.⁵

Wyoming and Alaska fund large portions of their budgets through severance taxes on oil, gas, and minerals, which lets them keep both property and income taxes low. A low property tax bill isn’t the same as a low total tax burden. Someone earning a high salary in Hawaii might pay far more in combined taxes than a similar earner in a state with moderate property taxes and no income tax. Run the full math before you commit to a move.

Exemptions That Can Lower Your Bill Further

Homestead Exemptions

Most states offer a homestead exemption that reduces the taxable value of your primary residence. The requirements are similar almost everywhere: you must own the home, live in it as your main residence, and apply through your county assessor or tax office. Some states shave a flat dollar amount off assessed value, while others use a percentage reduction. Savings range from a few hundred dollars to tens of thousands depending on the state and the property. You typically apply once and reconfirm periodically, though deadlines vary by jurisdiction.

Senior and Disability Exemptions

Many states freeze the assessed value of a home once the owner reaches a certain age, usually 65, or provide a flat deduction from the annual bill. Income limits often apply, so a retiree with a modest pension may qualify while a high-income senior does not. People with permanent disabilities can generally access similar programs through their local tax assessor’s office. The application usually requires medical documentation and proof of residency, often due in early spring.

Veteran Exemptions

Veterans with service-connected disabilities receive some of the most generous property tax breaks available. More than 20 states offer full property tax exemptions to veterans with a 100-percent disability rating from the Department of Veterans Affairs. In those states, the entire annual bill is waived on the veteran’s primary residence. Veterans with partial ratings often qualify for proportional reductions. If you’re a veteran and you’re buying a home, this is one of the first things worth checking with the county.

1
Tax Foundation. Property Taxes by State and County, 2026
2
Alabama Legislature. Alabama Code 40-8-1 – Classification of Property; Assessment Rate
3
Colorado Department of Property Taxation. Understanding Property Taxes in Colorado
4
Tax Foundation. Taxes in Hawaii
5
Department of Taxation. Tax Year Information – 2025
6
Tax Foundation. Nevada Tax Rates, Collections, and Burdens
7
Nevada Legislature. NRS Chapter 361 – Property Tax
8
Tax Foundation. Taxes in Wyoming
9
Tennessee Department of Revenue. Sales and Use Tax