Property Taxes by State: Ranked From Highest to Lowest in 2026

Property taxes are one of the least exciting parts of buying a home. They are also one of the easiest expenses to underestimate.

A buyer may spend weeks comparing mortgage rates, negotiating the purchase price, and deciding whether to put 10% or 20% down, only to treat property taxes as a minor line item. In some states, they are anything but minor. The difference between buying in a high-tax state and a low-tax state can add hundreds of dollars to the monthly housing payment.

Property taxes are collected by local governments to pay for schools, police and fire departments, libraries, parks, road maintenance, emergency services, and other public expenses. The amount you pay generally depends on the taxable value of your property and the tax rates imposed by your county, city, school district, and other local authorities.

The state rankings below provide a useful starting point, but they should not be treated as a quote for a specific home. Property taxes are local. Two homes with the same purchase price in different counties—or sometimes different school districts—can have meaningfully different tax bills.

Why Property Tax Rates Vary So Much

Property tax rates vary because local governments do not all have the same budgets, property values, public services, or sources of revenue.

A community with highly rated public schools, extensive parks, full-time emergency services, and significant local infrastructure may need to collect more property tax revenue. Another municipality may provide fewer services or receive more of its funding from sales taxes, income taxes, tourism, natural resources, or state appropriations.

Property values also affect the rate a municipality needs to charge. Consider two towns that each need to collect $100 million in property taxes. If the first town has a large tax base filled with high-value homes and commercial property, it may be able to raise the necessary revenue with a relatively low effective rate. A town with lower property values may need a higher rate to collect the same amount.

This is why the effective tax rate does not tell the entire affordability story. A homeowner in Hawaii may face one of the lowest effective rates in the country but still receive a substantial tax bill because of the home’s value. A homeowner in Illinois may purchase a less expensive property but face a much higher effective rate.

The correct comparison is not simply the tax percentage. Buyers should compare the expected annual tax bill, the home’s likely assessed value, available exemptions, and the total monthly mortgage payment.

How Property Taxes Are Calculated

Property taxes are generally determined using two pieces of information: the property’s taxable assessed value and the applicable local tax rate.

The assessed value is the value assigned to the property by the local taxing authority. It is not always the same as the purchase price, appraised value, or current market value. Some jurisdictions assess homes at full market value. Others use an assessment ratio, apply annual increase limits, or subtract exemptions before calculating the taxable value.

The tax rate may be expressed as a percentage or as a millage rate. One mill represents $1 of tax for every $1,000 of taxable property value.

For example, assume a home has a taxable assessed value of $500,000 and the combined effective property tax rate is 1.00%. The estimated annual property tax bill would be $5,000, or roughly $417 per month.

At a 1.88% rate, the estimated bill on the same taxable value would be $9,400 per year, or about $783 per month. The home price has not changed. The tax rate has—and so has the buyer’s monthly housing expense.

Actual calculations can be more complicated because a property may be subject to county, municipal, school district, utility district, and special assessment taxes. Homestead exemptions, senior exemptions, veteran benefits, assessment caps, and recently approved bond measures can also change the final bill.

Property Taxes by State, Ranked Highest to Lowest

The table below ranks states according to their effective property tax rates. The estimated annual property tax amounts are based on the same median home value used for each state, allowing the differences in effective tax rates to be compared directly.

What These State Property Tax Rankings Actually Tell Buyers

The rankings show how dramatically effective property tax rates differ across the country. They do not prove that homes in lower-ranked states are automatically more affordable.

Texas, for example, has one of the highest effective property tax rates in the country. It also does not impose a state individual income tax. Florida has a lower effective property tax rate and no state individual income tax, but homeowners in some Florida markets may face higher insurance premiums, flood insurance requirements, condominium assessments, or community fees.

California appears in the lower half of the property tax rankings, but high home values can still produce large annual tax bills. New Jersey and Illinois combine comparatively high effective rates with local markets where buyers need to examine the tax history of each property carefully.

A buyer relocating from one state to another should compare the complete financial picture:

• The actual tax bill: Review the latest bill for the property rather than relying only on a statewide average.
• The expected reassessment: A current owner’s tax bill may be based on an older purchase price, capped assessment, or exemption that will not transfer.
• Homeowners insurance: Lower property taxes do not help much if insurance costs several thousand dollars more per year.
• State and local income taxes: Some states rely more heavily on income taxes, while others collect more through property or sales taxes.
• Home prices: A low tax rate applied to an expensive home can still create a large payment.
• Exemptions and assessment limits: Homestead protections can materially reduce the taxable value or limit future increases.

State averages are useful for comparison. The property-specific tax estimate is what belongs in the budget.

Why the Seller’s Property Tax Bill Can Be Misleading

One of the most common homebuying mistakes is assuming the seller’s current tax bill will become the buyer’s tax bill.

The seller may have owned the home for many years and benefit from an assessment cap. The property may have a homestead, senior, agricultural, veteran, or disability exemption. New construction may initially be taxed only on the land before the completed home is added to the assessment. A substantial renovation can also trigger a higher valuation.

After the sale, the taxing authority may reassess the property using its current value or purchase price. The new owner may eventually qualify for a homestead exemption, but the first full tax bill can still be considerably higher than the amount shown in the listing.

This can create an escrow shortage. The mortgage servicer initially estimates the monthly property tax deposit using the information available at closing. If the reassessed bill is higher, the escrow account may not contain enough money to cover it. The homeowner must then repay the shortage while also contributing enough to cover the higher bill going forward.

The interest rate did not change. The principal and interest payment did not change. The total mortgage payment increased because the tax estimate caught up with reality.

A knowledgeable loan officer should calculate the housing payment using a reasonable estimate of the buyer’s future taxes—not simply copy the seller’s current bill and hope for the best.

Are Property Taxes Included in Your Mortgage Payment?

Property taxes are often included in the monthly mortgage payment through an escrow account.

The homeowner pays one monthly amount to the mortgage servicer. The servicer applies part of that payment to principal and interest and deposits the remaining amount into escrow for property taxes and homeowners insurance. When the tax bill or insurance premium comes due, the servicer pays it from the account.

Escrow does not reduce the cost. It spreads large annual or semiannual bills across 12 monthly payments.

Some borrowers may be permitted to waive escrow and pay property taxes directly. Eligibility depends on the loan program, lender, loan-to-value ratio, state rules, and investor requirements. A lender may also charge for the waiver or price the loan differently.

Waiving escrow can provide more control, especially for borrowers who prefer to hold and manage their own money. It also requires discipline. Missing a property tax payment can lead to penalties, liens, and potentially serious consequences for the property.

How to Lower Your Property Tax Bill

Homeowners usually cannot negotiate the local tax rate. They may, however, be able to reduce the taxable assessed value or challenge an incorrect valuation.

Review the Assessment for Errors

Start by reviewing the property record maintained by the assessor. Confirm that the square footage, bedroom count, lot size, property classification, improvements, and other details are accurate.

An assessor who believes the home has an extra bedroom, finished basement, larger lot, or additional living area may assign an inflated value. Correcting a factual error can provide a stronger basis for a reduction than simply arguing that the bill feels too high.

Appeal an Overvalued Assessment

Homeowners generally have the right to appeal an assessment, but the process and deadlines vary by jurisdiction.

A persuasive appeal usually includes evidence. Recent comparable sales, photographs showing the property’s condition, contractor estimates for major repairs, an appraisal, or documentation of factual errors can support the argument that the assessed value is too high.

The appeal deadline may arrive shortly after the assessment notice. Waiting until the tax bill is due may be too late for that assessment year.

Apply for Available Exemptions

Property tax exemptions can reduce the taxable value of a home or, in some cases, eliminate part of the tax obligation. Common programs include:

• Homestead exemptions: Generally available for an owner’s primary residence.
• Senior exemptions: Offered in many jurisdictions to homeowners who meet age and sometimes income requirements.
• Veteran exemptions: Benefits may be available to veterans, disabled veterans, surviving spouses, or other eligible households.
• Disability exemptions: Some states or municipalities provide relief for qualifying homeowners with disabilities.
• Agricultural classifications: Land used for qualifying agricultural purposes may receive a different valuation.

These benefits are not always automatic. Homeowners may need to apply after closing and submit additional documentation.

Frequently Asked Questions About Property Taxes

Which states have no property taxes?

Every state has property taxes in some form. The taxes are generally imposed by local governments rather than collected as one uniform statewide charge. Some states have much lower effective rates, but buying in a low-tax state does not mean the property will have no annual tax bill.

Do property taxes increase every year?

Not necessarily. Property taxes may remain stable, decrease, or increase depending on the home’s assessed value, local tax rate, exemptions, assessment caps, and government budget decisions.

A rising assessment does not always produce an equally large tax increase. The tax rate may decline, an exemption may apply, or local law may limit annual increases. The reverse can also occur: a stable assessed value can still produce a higher bill if the local tax rate increases.

Can you appeal a property tax assessment?

Yes. Most jurisdictions provide a formal process for challenging an assessment. The homeowner usually must file by a specific deadline and provide evidence showing why the assessed value is incorrect or excessive.

Do you continue paying property taxes after paying off your mortgage?

Yes. Paying off the mortgage eliminates the loan, not the property tax obligation.

Without a mortgage servicer collecting escrow, the homeowner becomes directly responsible for tracking the due dates and paying the taxing authority.

What happens if property taxes are not paid?

The taxing authority may charge interest and penalties and place a tax lien against the property. Continued nonpayment can eventually lead to a tax sale or foreclosure process, depending on state and local law.

Homeowners who cannot pay should contact the local tax office as early as possible. Payment plans, deferrals, hardship programs, or additional exemptions may be available.

The Bottom Line

Property taxes should be reviewed before making an offer, not discovered after closing.

The statewide effective rate can help buyers understand the general tax environment, but the useful number is the estimated bill for the specific property after the purchase. Buyers should review the current tax record, ask how reassessment works, account for exemptions that may disappear, and determine which exemptions they can claim.

A higher property tax state does not automatically make homeownership unaffordable. The right purchase price, loan structure, down payment, seller concessions, insurance strategy, and exemption planning can offset a substantial portion of the difference.

LendFriend Mortgage helps buyers evaluate the complete monthly payment before they commit to a home. That includes more than principal and interest. It means looking closely at property taxes, insurance, mortgage insurance, homeowners association dues, and the possibility of reassessment so the loan works on closing day and continues to work after the first escrow analysis.

Schedule a call today or get in touch by completing this quick form, and we'll help you start building your real estate empire.