Which state has the highest property taxes in 2026?

New Jersey and Illinois are tied at a 1.88% effective rate on owner-occupied housing in the Tax Foundation's 2026 table (2024 ACS data), roughly $1,880 per year for every $100,000 of home value. Connecticut, Vermont, and New Hampshire round out the top five.

Which state has the lowest property taxes?

Hawaii, at a 0.29% effective rate, followed by Alabama (0.37%), Utah and Arizona (0.48%), and South Carolina (0.49%). Note that low rates on expensive homes can still mean sizable dollar bills, Hawaii's median bill is far from the nation's lowest.

What is an effective property tax rate?

It is the property taxes actually paid divided by the home's market value, expressed as a percentage. It differs from the statutory millage rate on your bill because states assess property at different fractions of market value and offer different exemptions. Effective rates are the only fair way to compare states.

Do rental properties pay the same property tax rate as owner-occupied homes?

Often no. The rates on this page cover owner-occupied housing, several states tax investor-owned property more heavily. South Carolina is the sharpest example: owner-occupied homes are assessed at 4% of value while non-owner-occupied property is assessed at 6% and loses school-tax relief, so an investor's bill can run 2.5-3x the owner-occupant's. Homestead caps in Florida, Texas, and elsewhere create similar (smaller) gaps.

How do property taxes affect rental property returns?

They are typically the largest operating expense. On a $300,000 rental grossing $24,000/year, the difference between a 0.5% state (about $1,500) and a 1.9% state (about $5,700) is roughly 1.4 percentage points of cap rate, often the entire margin between a deal that cash-flows and one that does not.

Are property taxes based on what I paid for the house?

Usually on assessed value, which tracks market value with a lag and, in some states, legal caps. California's Prop 13 limits assessed-value growth to 2% per year until a sale, Florida's homestead cap works similarly for owner-occupants. Investors buying such properties should budget for the tax bill resetting to their purchase price, not the seller's old bill.

Can property tax rates change after I buy?

Yes. Local governments set levies annually, and reassessments follow local price growth. High-growth metros routinely see assessed values, and bills, climb faster than rents. Budgeting a 2-4% annual increase in the tax line is a common conservative practice.

Home / Data / Property Tax Rates by State

Property Tax Rates by State (2026)

Data last reviewed: July 2026

Property taxes are the largest recurring cost of owning real estate in most states, and the gap between the cheapest and most expensive states is more than sixfold. This page lists the effective property tax rate on owner-occupied housing for all 50 states and the District of Columbia, using the Tax Foundation's 2026 table (calculated from 2024 American Community Survey data, the most recent comparable vintage), then walks through what the numbers mean for rental underwriting.

Quick answer: New Jersey and Illinois have the highest effective rates (1.88%), followed by Connecticut (1.54%), Vermont (1.51%), and New Hampshire (1.50%). Hawaii has the lowest (0.29%), then Alabama (0.37%), Utah and Arizona (0.48%), and South Carolina (0.49%). Each 1.00% of effective rate equals $1,000 per year per $100,000 of home value.

Effective property tax rates, all states (2026 table)

Rates are property taxes paid as a share of owner-occupied home value, sorted highest to lowest. The DC figure (marked *) is an approximation, DC sits outside the Tax Foundation's 50-state table.

Rank	State	Effective rate	Tax per $100k of value	Notes
1	New Jersey	1.88%	$1,880
2	Illinois	1.88%	$1,880
3	Connecticut	1.54%	$1,540
4	Vermont	1.51%	$1,510
5	New Hampshire	1.50%	$1,500	No state income or general sales tax; property taxes carry local budgets.
6	Nebraska	1.44%	$1,440
7	Texas	1.40%	$1,400	No state income tax; school districts rely heavily on property taxes.
8	Ohio	1.36%	$1,360
9	Iowa	1.33%	$1,330
10	Wisconsin	1.32%	$1,320
11	New York	1.30%	$1,300
12	Pennsylvania	1.26%	$1,260
13	Kansas	1.21%	$1,210
14	Michigan	1.19%	$1,190
15	Rhode Island	1.12%	$1,120
16	Massachusetts	1.00%	$1,000
17	Minnesota	1.00%	$1,000
18	South Dakota	1.00%	$1,000
19	Maine	0.98%	$980
20	Alaska	0.94%	$940
21	Maryland	0.92%	$920
22	North Dakota	0.92%	$920
23	Missouri	0.89%	$890
24	Oregon	0.81%	$810
25	Georgia	0.79%	$790
26	Oklahoma	0.79%	$790
27	Florida	0.78%	$780	Homestead caps mean investor-owned homes are often reassessed at higher taxable values than the prior owner paid.
28	Virginia	0.78%	$780
29	Indiana	0.76%	$760
30	Washington	0.75%	$750
31	Kentucky	0.74%	$740
32	California	0.70%	$700	Prop 13 caps assessed-value growth; effective rates on long-held homes are far below rates on recent purchases.
33	North Carolina	0.66%	$660
34	New Mexico	0.63%	$630
35	Montana	0.61%	$610
36	Mississippi	0.58%	$580
37	District of Columbia	0.56%	$560	Approximate; DC sits outside the Tax Foundation 50-state table.
38	Arkansas	0.56%	$560
39	Louisiana	0.55%	$550
40	Delaware	0.54%	$540
41	Wyoming	0.53%	$530
42	Tennessee	0.52%	$520
43	West Virginia	0.51%	$510
44	Nevada	0.50%	$500
45	Colorado	0.50%	$500
46	Idaho	0.50%	$500
47	South Carolina	0.49%	$490	Owner-occupied homes are assessed at 4% of value; non-owner-occupied (investor) property is assessed at 6%, so investor bills often run ~2.5-3x the headline rate.
48	Arizona	0.48%	$480
49	Utah	0.48%	$480
50	Alabama	0.37%	$370
51	Hawaii	0.29%	$290	Lowest rate in the country, but high home values still produce material bills.

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The highest-tax states

New Jersey (1.88%), Illinois (1.88%), Connecticut (1.54%), Vermont (1.51%), New Hampshire (1.50%) top the table. The pattern: states that fund schools and local government primarily through property taxes, either because they lack other big levies (New Hampshire has no state income or general sales tax, Texas, at 1.40%, has no income tax) or because they layer property taxes on top of high income and sales taxes (New Jersey, Illinois, Connecticut). For investors, high-tax states are not automatically bad, the Midwest metros in our cap-rate ranking cash-flow well despite Ohio's 1.36%, but the tax line must be modeled with the county's actual rate, which can run far above the state average (Cuyahoga County, Ohio exceeds 2% effective in many suburbs).

The lowest-tax states

Hawaii (0.29%), Alabama (0.37%), Utah (0.48%), Arizona (0.48%), South Carolina (0.49%) sit at the bottom. Low rates amplify rental yields: Alabama's 0.37% is one reason Birmingham and Huntsville appear high on our best cities for 2026 list, and Tennessee's 0.52% does the same for Memphis and Nashville. One caution: a low rate is not a low bill when home values are high, Hawaii's 0.29% on an $800,000 home is still $2,320 a year, more than 1.36% on a $150,000 Ohio house.

How property taxes hit rental underwriting: a worked example

Take the same rental in two states: purchase price $250,000, rent $1,900/month ($22,800/year), and non-tax operating costs (insurance, maintenance, management, vacancy) of $6,300/year.

Tennessee (0.52%): taxes $1,300. Net operating income = $22,800 - $6,300 - $1,300 = $15,200, a 6.1% cap rate.
Illinois (1.88%): taxes $4,700. Net operating income = $22,800 - $6,300 - $4,700 = $11,800, a 4.7% cap rate.

Identical house, identical rent, and the tax line alone moves the yield by 1.4 percentage points, roughly the difference between positive and negative cash flow at 2026 mortgage rates. Run your own scenario in the rental property calculator, and estimate the full payment with the mortgage calculator.

Assessment nuances investors must know

Assessed value is not market value. States apply assessment ratios, caps, and lags. Your effective rate depends on how your county translates market value into taxable value, not just the millage.
Homestead exemptions do not travel to investors. Owner-occupant discounts (Florida homestead, Texas homestead, senior freezes) disappear when a property becomes a rental. The seller's current bill can badly understate what you will pay.
Some states surcharge non-owner-occupied property. South Carolina assesses investor property at 6% of value versus 4% owner-occupied, and removes school-operating relief, so investor bills often run 2.5-3x. Similar mechanics exist in various forms elsewhere, always price the investor rate for the specific county.
Purchases can trigger reassessment. California's Prop 13 and Florida's homestead cap both reset at sale, meaning your bill will be based on your purchase price even if the prior owner paid a fraction of it.

Frequently asked questions

Which state has the highest property taxes in 2026?: New Jersey and Illinois are tied at a 1.88% effective rate on owner-occupied housing in the Tax Foundation's 2026 table (2024 ACS data), roughly $1,880 per year for every $100,000 of home value. Connecticut, Vermont, and New Hampshire round out the top five.
Which state has the lowest property taxes?: Hawaii, at a 0.29% effective rate, followed by Alabama (0.37%), Utah and Arizona (0.48%), and South Carolina (0.49%). Note that low rates on expensive homes can still mean sizable dollar bills, Hawaii's median bill is far from the nation's lowest.
What is an effective property tax rate?: It is the property taxes actually paid divided by the home's market value, expressed as a percentage. It differs from the statutory millage rate on your bill because states assess property at different fractions of market value and offer different exemptions. Effective rates are the only fair way to compare states.
Do rental properties pay the same property tax rate as owner-occupied homes?: Often no. The rates on this page cover owner-occupied housing, several states tax investor-owned property more heavily. South Carolina is the sharpest example: owner-occupied homes are assessed at 4% of value while non-owner-occupied property is assessed at 6% and loses school-tax relief, so an investor's bill can run 2.5-3x the owner-occupant's. Homestead caps in Florida, Texas, and elsewhere create similar (smaller) gaps.
How do property taxes affect rental property returns?: They are typically the largest operating expense. On a $300,000 rental grossing $24,000/year, the difference between a 0.5% state (about $1,500) and a 1.9% state (about $5,700) is roughly 1.4 percentage points of cap rate, often the entire margin between a deal that cash-flows and one that does not.
Are property taxes based on what I paid for the house?: Usually on assessed value, which tracks market value with a lag and, in some states, legal caps. California's Prop 13 limits assessed-value growth to 2% per year until a sale, Florida's homestead cap works similarly for owner-occupants. Investors buying such properties should budget for the tax bill resetting to their purchase price, not the seller's old bill.
Can property tax rates change after I buy?: Yes. Local governments set levies annually, and reassessments follow local price growth. High-growth metros routinely see assessed values, and bills, climb faster than rents. Budgeting a 2-4% annual increase in the tax line is a common conservative practice.

Methodology & sources

State rates are effective property tax rates on owner-occupied housing from the Tax Foundation's "Property Taxes by State and County, 2026" table, which is calculated from 2024 American Community Survey data, one consistent vintage across all rows. The DC figure is an editorial approximation. Rates on investor-owned property can differ materially, per the assessment nuances above. Approximate, as of mid-2026. Data last reviewed: July 2026.

Zillow Research - Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI), metro-level typical home values and asking rents.
Tax Foundation - Effective property tax rates on owner-occupied housing by state (2026 table, 2024 American Community Survey data).
U.S. Census Bureau - American Community Survey data on household incomes, housing values, and property taxes paid.
FRED, Federal Reserve Bank of St. Louis - Historical series for home prices, rents, and mortgage rates used to sanity-check levels and trends.

All figures on this page are approximate estimates compiled for research and education, as of mid-2026. They are not investment advice, an offer to sell securities, or a substitute for your own underwriting. Metro-level averages hide wide neighborhood-level variation, always verify current local data before making decisions.

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