No state has eliminated property tax entirely, but a handful charge significantly lower rates or exempt certain types of property from taxation
The short answer: there is no state where property tax does not exist. Every state either collects property tax directly or allows counties and municipalities to do so. However, some states have rates so low or exemptions so broad that property owners in those states may pay little or nothing depending on what they own and where it sits.
The states with the lowest effective property tax rates are Hawaii, Alabama, Louisiana, and West Virginia. Hawaii's rate averages around 0.28% of home value. Louisiana and Alabama both average below 0.5%. These are the closest thing to "no property tax" states, though the tax still exists on the books and still applies to most residential property.
A few states exempt specific categories of property — agricultural land, homesteads, or business equipment — from property tax entirely. That is different from having no property tax. It means you may owe nothing if your property falls into an exempted category, but the tax system itself remains in place.
Key Takeaways
- Hawaii, Alabama, Louisiana, and West Virginia have the lowest property tax rates in the country, averaging under 0.5% of home value in most cases.
- No state has abolished property tax completely; every state either collects it or permits local governments to do so.
- Some states offer broad exemptions for homesteads, agricultural property, or business equipment, which can result in zero tax owed on those specific properties.
- Property tax rates and exemptions vary significantly by county and municipality within each state, so the rate you pay depends on your exact location and property type.
States with the lowest property tax rates
Hawaii leads the nation with an effective property tax rate of approximately 0.28% of assessed home value. This low rate results from both state law and the way Hawaii assesses property. The state does not tax intangible property, and counties have limited authority to raise rates without voter approval.
Alabama averages around 0.41% effective rate. Louisiana averages approximately 0.55%. West Virginia averages near 0.58%. In each of these states, a homeowner with a $200,000 house would typically owe between $560 and $820 per year in property tax — far below the national average of around 0.84%.
These low rates do not mean property tax is optional or that exemptions are automatic. You still receive a tax bill. The difference is the amount owed is smaller because the state or local government has set lower assessment rates or narrower tax bases than other states.
States with broad homestead exemptions
A homestead exemption removes a portion of your home's assessed value from taxation. In some states, this exemption is large enough that homeowners owe little or no property tax on their primary residence.
Florida exempts the first $50,000 of assessed value on a homestead property, and an additional $25,000 for homeowners over 65 or with disabilities. Texas exempts 20% of home value for homestead properties. Iowa exempts agricultural property from property tax if it is actively farmed. South Dakota has no state property tax on agricultural land used for farming.
To receive a homestead exemption, you typically must file a form with your county assessor's office, prove you own the property, and show it is your primary residence. The process and deadlines vary by state and county. Some states allow you to file online; others require a paper form mailed or delivered in person.
How property tax rates differ within states
Even in low-tax states, your actual bill depends on where your property is located. Hawaii has the lowest statewide rate, but individual counties set their own rates within state limits. A home in Honolulu County may have a different effective rate than one in Hawaii County.
In Alabama, Louisiana, and West Virginia, counties and municipalities set their own rates within state-imposed caps. A property in one county can be taxed at a significantly different rate than an identical property across the county line. School districts, fire districts, and other local authorities also add their own levies on top of the county rate.
Before moving to a state because of its low property tax rate, check the specific county and municipality where you plan to buy. The county assessor's office or tax assessor can tell you the exact rate that applies to residential property in that area.
States that tax personal property instead of real estate
A small number of states have shifted away from taxing real estate and instead tax personal property — vehicles, equipment, inventory, and other movable assets. This is not the same as having no property tax; it is a different tax base.
New Hampshire and Tennessee do not tax income or real estate, but both tax personal property and other assets. New Hampshire taxes vehicles and business equipment. Tennessee taxes business inventory and equipment but not vehicles. Neither state has eliminated property taxation; they have redirected it.
If you own a home in these states, you typically do not owe property tax on the building or land itself. However, you may owe tax on vehicles, rental equipment, or business assets you own. The total tax burden depends on what you own, not just where you live.
How to find your state and local property tax rate
Your county assessor's office maintains the official property tax rate for your location. You can find contact information through your county government website or by searching "[your county name] assessor." Most assessor offices publish current rates online and can tell you the rate that applies to residential property.
The Tax Foundation publishes an annual ranking of state effective property tax rates based on home value. This gives you a rough comparison between states, but your actual rate will depend on your specific county and municipality.
If you own property, your tax bill should arrive annually. The bill shows the assessed value, the tax rate applied, and the total amount owed. If you are considering buying property in a new state, ask the real estate agent or title company for the current property tax rate in that area before you make an offer.
Frequently Asked Questions
Can I move to a state with no property tax to avoid paying it?
No state has eliminated property tax entirely. However, you can move to a state with a lower rate. Hawaii, Alabama, Louisiana, and West Virginia have rates below 0.5%. Keep in mind that moving involves other costs — closing costs, moving expenses, and potential changes to income tax or sales tax — so the total tax savings may be smaller than the property tax difference alone.
If I have a homestead exemption, do I owe any property tax?
Usually yes, but the amount is reduced. A homestead exemption removes a portion of your home's value from taxation. If your home is worth $200,000 and your state exempts $50,000, you pay tax only on $150,000. You still receive a tax bill, but it is smaller than it would be without the exemption.
Do I have to file for a homestead exemption, or is it automatic?
In most states, homestead exemptions are not automatic. You must file a form with your county assessor's office, usually within a specific deadline. Some states allow online filing; others require a paper form. Check your county assessor's website for the deadline and filing method in your area.
What happens if I buy property in a low-tax state but move away?
If you move and the property is no longer your primary residence, you typically lose the homestead exemption and owe full property tax on the assessed value. If you rent the property to tenants, it becomes investment property and is taxed at the standard rate for that county. You remain responsible for paying property tax as long as you own the property.
Are property taxes the same in every county within a state?
No. Even in states with low overall rates, individual counties and municipalities set their own rates within state limits. School districts, fire districts, and other local authorities also add their own levies. Two homes of equal value in the same state can have different tax bills depending on which county they are in.