Five states have no statewide property tax on real estate
Alaska, Delaware, Montana, New Hampshire, and Wyoming do not charge a statewide property tax on residential or commercial real estate. This does not mean property owners pay nothing — most of these states fund schools and services through other taxes, and some allow counties or municipalities to levy their own property taxes. The absence of state property tax is one factor in housing costs, but it is not the only one, and it does not automatically make a state cheaper to live in.
If you are considering a move based on property tax, you need to look at the full tax picture: income tax, sales tax, and what local governments actually charge. A state with no property tax but a high income tax may cost you more than a state with moderate property tax and no income tax.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Wyoming have no statewide property tax, but local governments in some of these states can still charge property tax.
- Most states without property tax make up the revenue through income tax, sales tax, or both — so your total tax burden depends on how you earn and spend money.
- Alaska has no state income tax or sales tax, making it the lowest-tax state overall, but housing costs are high in many areas.
- New Hampshire and Tennessee have no sales tax but do tax investment income, which affects retirees differently than working-age people.
How each no-property-tax state funds government services
Alaska relies on oil revenue and a small sales tax. It has no state income tax and no statewide property tax, though some boroughs (counties) do charge property tax. The state's Permanent Fund pays residents an annual dividend from oil investments, which can range from a few hundred to over $1,000 per person depending on the year.
Delaware has no property tax but charges income tax on wages and investment income, plus a 6% sales tax. It also taxes corporate income heavily, which is why many businesses incorporate there. Property owners pay no annual property tax, but the state makes up the revenue through income and corporate taxes.
Montana has no property tax on real estate but charges income tax on wages and investment income, plus a 0% to 6.84% tax depending on income level. It also has a 0% sales tax statewide, though some counties add a local sales tax. Montana's lack of sales tax is unusual among states without property tax.
New Hampshire has no property tax and no sales tax, but it taxes investment income (dividends and interest) at 5%. It also charges income tax on wages at 5.5%. For retirees living on investment income, this can be a significant cost. Working-age people with wage income may find New Hampshire cheaper than states with property tax.
Wyoming has no property tax, no income tax, and no sales tax. It funds schools and services through excise taxes on fuel, alcohol, and tobacco, plus severance taxes on mineral extraction. Wyoming is the lowest-tax state overall, but housing costs vary widely by region.
Local property taxes in no-property-tax states
Even though these five states do not charge statewide property tax, local governments sometimes do. Alaska allows boroughs to levy property tax — Anchorage and Juneau do, while other areas do not. Delaware allows counties to charge property tax, though most do not. Montana and Wyoming do not allow local property tax. New Hampshire does not allow local property tax on real estate, though towns can charge a tax on land use change.
Before moving to one of these states, check whether your specific county or municipality charges property tax. A borough in Alaska or a county in Delaware might charge property tax even though the state does not. Local tax rates and what they fund vary significantly.
How property tax compares to other taxes you pay
Property tax is usually a percentage of your home's assessed value, paid annually. In states that charge it, rates range from under 0.3% to over 2% of home value per year. A $300,000 home in a high-property-tax state might cost $6,000 to $9,000 per year in property tax alone.
States without property tax typically charge higher income tax or sales tax to make up the difference. New Hampshire and Wyoming have no sales tax but tax income differently. Alaska has no income or sales tax but relies on oil revenue and excise taxes. Delaware has both income and sales tax. The total amount you pay in taxes depends on your income, how much you spend, and whether you own property.
If you earn $60,000 per year and own a $300,000 home, your tax burden in a no-property-tax state might be lower than in a high-property-tax state — but only if that state also has low income tax. Run the numbers for your specific situation before deciding to move.
Housing costs beyond property tax
Property tax is one part of housing costs, but it is not the largest part for most people. Mortgage interest, insurance, maintenance, and utilities usually cost more than property tax. In Alaska and Wyoming, housing prices are high in some areas despite low taxes, because of limited housing supply and construction costs.
A state with no property tax but expensive housing and high insurance costs may not save you money compared to a state with moderate property tax and lower overall housing prices. Research the full cost of living in the specific city or region you are considering, not just the tax rate.
Frequently Asked Questions
Do I have to pay property tax if I own a home in Alaska or Wyoming?
It depends on where in the state you own property. Wyoming has no statewide or local property tax on real estate. Alaska has no statewide property tax, but some boroughs (like Anchorage) do charge local property tax. Check with your specific borough or county before buying.
Can I deduct property tax on my federal income tax return if I live in a no-property-tax state?
You can only deduct property tax you actually pay. If your state has no property tax, you have nothing to deduct. You may be able to deduct state income tax or sales tax instead, depending on your situation and the current tax rules.
Is New Hampshire really tax-free if it taxes investment income?
New Hampshire has no property tax, no sales tax, and no income tax on wages — but it does tax dividends and interest at 5%. For working-age people earning wages, it is very low-tax. For retirees living on investment income, the tax burden is higher than in states with no income tax at all.
If I move to a no-property-tax state, will my total taxes go down?
Not necessarily. It depends on your income, how much you spend, and what you own. Someone earning $100,000 per year might pay less total tax in Wyoming (no income or property tax) than in a high-property-tax state. Someone earning $40,000 might pay more in New Hampshire (which taxes investment income) than in a state with moderate property tax and no income tax. Calculate your specific tax burden before moving.