Best states for low property taxes

Key takeaways:

• Hawaii, Idaho and Arizona are among the best states for low property taxes.
• Illinois, New Jersey and Connecticut are among the worst states for property taxes.
• Average property tax rates have fallen in recent years, but bills have risen with home values.

When buying a home in a different state, property taxes are often top of mind.

Property taxes vary widely across the U.S., but some states have much more lower rates, according to data provided to ConsumerAffairs by property-data firm ATTOM, which analyzed taxes and home values in 2024.

New York isn't in the analysis due to limitations in data gathering.

Property taxes are charged by local governments on home values to fund services, infrastructure and schools.

"Personal preferences will dictate how advantageous a place is to live," ATTOM CEO Rob Barber told ConsumerAffairs. "Having a low effective tax rate may mean less money out of your pocket, but it can also affect the quality of government services."

Higher home values and effective property tax rates in parts of the Northeast and Midwest are often helping support more local services, compared with typically lower values and rates in the South and West, Barber said.

Hawaii was the best state for low property taxes in 2024, with an effective rate of 0.33%, followed by Idaho (0.41%), Arizona (0.41%), Alabama (0.41%) and Delaware (0.43%).

Illinois was the worst state for low property taxes in 2024, with an effective rate of 1.87%, and the other five worst states were New Jersey (1.59%), Connecticut (1.48%), Nebraska (1.32%) and Ohio (1.31%).

Still, home values are very different across states, cities and counties, which determines how much is paid in a property tax bill.

"If you can afford it, there are a handful of wealthy coastal cities where home values tend to be very high, and the effective tax rate tends to be low," Barber said.

He said an example is San Jose, California, where the average value of a single-family home was around $2.1 million and the effective tax rate was 0.6%.

Even though Hawaii had the lowest effective property tax in 2024, the average yearly property tax bill was $4,157, the 16th highest in nation.

The average home value in Hawaii was around $1.27 million in 2024.

States that had both low property tax rates and bills were West Virginia ($1,027), Alabama ($1,200), Arkansas ($1,397), and Tennessee ($1,851) and South Carolina ($2,064).

Property tax rates falling but bills are up

Some good news is that property tax rates have trended down in recent years.

ATTOM said the average effective tax rate for single-family homes was 0.86% in 2024, down slightly from 0.87% in 2023.

But property tax bills have been rising with home values and inflation.

American homeowners paid an average of $4,172 in property taxes in 2024, up from $3,561 five years ago in 2019.

Still, Barber said that rising home values don't always mean higher property taxes.

"In many areas, we’ve seen taxes increase not just due to property appreciation, but also because of growing costs to operate local governments and schools or shifts in how tax burdens are distributed," he said.