Which States Have No Property Tax on Homes? Exemptions and Rates

No state has eliminated property tax on homes. All 50 states and the District of Columbia tax residential real estate at some level, so there are no states with no property tax on homes in an absolute sense.¹ What does exist is a wide gap between the cheapest and most expensive states, and a set of exemptions that can bring an individual homeowner’s bill all the way down to zero. If you are hoping to avoid property tax entirely, your realistic paths are living in a low-rate state, qualifying for a full exemption, or both.

Why No State Skips Property Tax

Property tax is primarily a local tax. State law sets the framework, but counties, cities, and school districts do the assessing and collecting.² The money pays for public schools, fire departments, road maintenance, and other services that would otherwise have to be funded through higher income or sales taxes. Local budgets depend so heavily on this revenue that no jurisdiction has walked away from it. The only real question for a homeowner is how much.

States with the Lowest Property Tax Rates

The effective property tax rate measures actual taxes paid as a percentage of a home’s market value. The national average is roughly 1 percent. A handful of states sit well below that line.¹

Hawaii — 0.27%. The lowest effective rate in the country. Property taxes are administered entirely at the county level, and high home values let a small percentage still fund local budgets.
Alabama — 0.38%. Residential property is taxed at a lower tier than commercial property, keeping the effective rate among the lowest nationally.
Nevada — 0.49%. State law caps annual property tax increases at 3 percent for a primary residence, so bills stay predictable even as home values climb.
Colorado — 0.49%. A residential assessment rate, currently 6.8 percent of the first $700,000 in market value, shrinks the taxable base before the local mill levy is applied.
South Carolina — 0.51%. Owner-occupied homes receive a favorable assessment ratio compared with other property types.
Wyoming — 0.55%. A relatively low population and heavy reliance on mineral-extraction revenue help keep residential rates modest.

A low rate does not automatically mean a low bill. Hawaii’s rate is the smallest in the country, but its median home value is among the highest, so the dollar amount can still be substantial. The reverse is also true: a state with a higher rate but lower home prices can produce a smaller actual payment. When you compare places to live, look at both the effective rate and typical home prices in the specific county you are considering.

Exemptions That Can Take Your Bill to Zero

Even though every state taxes residential property, many homeowners qualify for exemptions that substantially lower — or fully eliminate — what they owe. In every case you have to apply through your local assessor’s office and provide documentation.

Full Exemptions for Disabled Veterans

This is the clearest path to a zero property tax bill on a home. Every state offers some form of property tax relief for disabled veterans, and roughly 18 states provide a full exemption, meaning a qualifying veteran pays no property tax on their primary home. Eligibility generally requires a VA disability rating at or above a set threshold, often 100 percent for the full exemption, plus proof of residency and identification. Surviving spouses of veterans killed in the line of duty often qualify as well.

Homestead Exemptions

Homestead exemptions shield a portion of your primary residence’s assessed value from taxation. The details vary, but the structure is consistent: a fixed dollar amount or percentage is subtracted from your assessed value before the tax is calculated. For homeowners with modest property values, the deduction can bring the taxable value, and therefore the tax, down to zero. Most states restrict homestead exemptions to your primary residence, so second homes and rental properties do not qualify.

Senior Freezes and Age-Based Relief

Many jurisdictions freeze a senior homeowner’s assessed value at a base-year level, preventing the bill from rising as property values climb. Freezes typically require the homeowner to be at least 65 and, in some cases, to fall below a maximum income threshold. Because the freeze locks in the assessed value rather than the tax rate itself, the bill can still shift slightly if mill levies change, but the effect of rising home prices is removed.

Circuit Breaker Credits

A total of 29 states offer circuit breaker programs for homeowners whose property taxes eat up a disproportionate share of their income. Instead of reducing your assessed value by a fixed amount, a circuit breaker ties relief to income: if your property tax exceeds a set percentage of your earnings, the program refunds or credits the difference. Some states limit these programs to seniors or people with disabilities. Thirteen states open them to any homeowner who meets the income cap.³

The Other End: States with the Highest Rates

If you are comparing locations, it helps to see the full spread. Several states impose effective rates more than six times higher than Hawaii’s.¹

New Jersey — 2.23%. The highest effective rate in the country. On a $400,000 home, that works out to roughly $8,920 a year.
Illinois — 2.07%. Rates are driven partly by the large number of overlapping local taxing districts. A single property can be subject to levies from a county, city, school district, park district, and multiple special districts at once.
Connecticut — 1.92%. Heavy reliance on property tax revenue to fund municipal services and education keeps rates near the top.

Vermont, New Hampshire, and Texas also sit well above the national average.

How a Rate Turns Into Your Actual Bill

Your tax bill is not simply your home’s market value multiplied by a single rate. Most jurisdictions use a multi-step calculation, and the intermediate steps are why effective rates differ so much between states.

Local assessors first determine your home’s market value, meaning what it would sell for in a normal transaction. Many states then apply an assessment ratio that reduces the taxable portion of that value. If your home is worth $300,000 and your state applies a 10 percent assessment ratio, only $30,000 is subject to tax.

The tax rate itself is typically expressed in mills. One mill equals one dollar of tax per $1,000 of assessed value. Your total millage is the sum of levies set by every local taxing body covering your address, including the county, city or town, school district, and any special districts for libraries, fire protection, or infrastructure bonds. Two homes on opposite sides of a school district line can face noticeably different bills for this reason.

A Note on the Federal SALT Deduction

The federal government does not tax your home, but it does let you deduct state and local property taxes if you itemize. For the 2026 tax year, the state and local tax deduction is capped at $40,400 for most filers, or $20,200 if married filing separately. That cap covers your property taxes, state income taxes, and state sales taxes combined, not property taxes alone.⁴

The $40,400 figure was set by the One Big Beautiful Bill Act, signed in July 2025, which raised the previous $10,000 limit. For taxpayers with adjusted gross income above $505,000, the cap phases down by 30 cents for every dollar of income over the threshold. The higher cap is scheduled to stay in place through 2029 and then revert to $10,000 unless Congress acts.⁴ For homeowners in high-tax states, the deduction takes some of the edge off, but it does not erase the underlying bill and does not turn any state into a no-property-tax state.

Bottom Line for Homebuyers

If avoiding property tax is a priority, the closest options are Hawaii, Alabama, Nevada, Colorado, South Carolina, and Wyoming, all with effective rates under 0.55 percent. If you are a disabled veteran, senior, or lower-income homeowner, check your state’s exemption programs first. The right combination of location and exemption is what actually gets a homeowner to zero, because the state itself never will.

1
Tax Foundation. Property Taxes by State and County, 2025
2
Tax Policy Center. How Do State and Local Property Taxes Work
3
National Conference of State Legislatures. The Most-Hated Tax and What States Are Doing About It
4
Bipartisan Policy Center. How Does the 2025 Tax Law Change the SALT Deduction