Taxes are an inevitable part of the life of an American citizen. Each year, citizens pay a substantial amount in terms of tax to the government.
Along with the federal tax imposed by the government, citizens are also required to pay the tax imposed by their respective state governments on different commodities and products.
Real Estate Tax or Property Tax is one such tax levied from the citizens by the local government where the property is located. The amount collected as property tax is determined based on different factors.
The property owner is expected to pay a sum as tax which is calculated by multiplying the property tax rate by the current market value. As these values tend to change over time, the property tax is calculated annually.
The money collected by the government as property tax is used for different purposes. Mostly, the tax money is used for the improvement of public facilities like improving the public education system, transportation, water and sewer improvements, and also for the betterment of law enforcement.
Top States With Lowest Property Tax In The U.S.
The property tax implemented by the local authorities is not the same all throughout the country. While some states have a very high rate of property tax, there are also states who collect very small amounts of property tax. The state with the lowest property tax in the United States is Hawaii.
The state only has a rate of 0.29% as property tax. Even though the state has a very low rate for the tax, the residents of the state are expected to pay a sum of $1,607 as property tax. While the tax rate is very low, Hawaii reportedly has a very high median house cost.
The American state with the second lowest property tax rate is Alabama. The state of Alabama has a property tax rate of 0.42%. The states also have one of the lowest median house prices in the country, which brings the annual tax down to just $572.
Louisiana has the third lowest property tax rate which is 0.53%. One of the reasons for the low tax rate in Louisiana is the homestead exemption by the state. This reduces the taxable value of an owner-occupied property by around $7,500 in assessed value.
The state that occupies the fourth place in the list of states with the lowest property tax rate is Colorado. The state has a property tax rate of 0.53%. It is followed by the state of Columbia, which has a property tax rate of 0.55%.
Top States With Highest Property Tax Rate In The U.S.
The state of New Jersey has the highest property tax rate in the United States. The property tax rate of the country is almost 2.21%. Currently, there are only two states in the country that have crossed the 2% mark in the property tax rate.
The other state, which is currently in the second position in terms of highest property tax is Illinois. Illinois was the first state in the country to cross the 2% mark in terms of the property tax rate.
But as the state has a very low average home value, the annual tax will not pose a big problem to property owners. The property tax rate of Inninois is 2.05% now.
The state of New Hampshire comes in third position with a tax rate of 1.96%. The state has a tax rate that is almost close to. It should also be noted that New Hampshire also has one of the highest average home value prices and annual property taxes among the states.
The fourth position is occupied by Vermont with a tax rate of 1.82% and is followed by Connecticut which has a property tax rate of 1.76%.
Here is a list of property tax by the state which includes effective property tax rate, median home value, and also the median real estate tax paid by their citizens.
◾ Alabama Property Tax
- Effective Property Tax Rate: 0.42%
- Median Home Value: $172,300
- Median Real Estate Tax Paid: $742
◾ Alaska Property Tax
- Effective Property Tax Rate: 1.24%
- Median Home Value: $300,100
- Median Real Estate Tax Paid: $3,716
◾ Arizona Property Tax
- Effective Property Tax Rate: 0.60%
- Median Home Value: $283,900
- Median Real Estate Tax Paid: $1,717
◾ Arkansas Property Tax
- Effective Property Tax Rate: 0.66%
- Median Home Value: $157,300
- Median Real Estate Tax Paid: $1,031
◾ California Property Tax
- Effective Property Tax Rate: 0.81%
- Median Home Value: $591,300
- Median Real Estate Tax Paid: $4,804
◾ Colorado Property Tax
- Effective Property Tax Rate: 0.52%
- Median Home Value: $407,100
- Median Real Estate Tax Paid: $2,125
◾ Connecticut Property Tax
- Effective Property Tax Rate: 2.16%
- Median Home Value: $289,600
- Median Real Estate Tax Paid: $6,251
◾ Delaware Property Tax
- Effective Property Tax Rate: 0.62%
- Median Home Value: $274,800
- Median Real Estate Tax Paid: $1,694
◾ District of Columbia Property Tax
- Effective Property Tax Rate: 0.59%
- Median Home Value: $636,600
- Median Real Estate Tax Paid: $3,754
◾ Florida Property Tax
- Effective Property Tax Rate: 0.89%
- Median Home Value: $266,100
- Median Real Estate Tax Paid: $2,372
◾ Georgia Property Tax
- Effective Property Tax Rate: 0.95%
- Median Home Value: $226,600
- Median Real Estate Tax Paid: $2,151
◾ Hawaii Property Tax
- Effective Property Tax Rate: 0.29%
- Median Home Value: $669,200
- Median Real Estate Tax Paid: $1,915
◾ Idaho Property Tax
- Effective Property Tax Rate: 0.63%
- Median Home Value: $277,400
- Median Real Estate Tax Paid: $1,741
◾ Illinois Property Tax
- Effective Property Tax Rate: 2.29%
- Median Home Value: $227,700
- Median Real Estate Tax Paid: $5,213
◾ Indiana Property Tax
- Effective Property Tax Rate: 0.83%
- Median Home Value: $165,900
- Median Real Estate Tax Paid: $1,373
◾ Iowa Property Tax
- Effective Property Tax Rate: 1.59%
- Median Home Value: $169,600
- Median Real Estate Tax Paid: $2,700
◾ Kansas Property Tax
- Effective Property Tax Rate: 1.40%
- Median Home Value: $182,000
- Median Real Estate Tax Paid: $2,556
◾ Kentucky Property Tax
- Effective Property Tax Rate: 0.89%
- Median Home Value: $169,600
- Median Real Estate Tax Paid: $1,508
◾ Louisiana Property Tax
- Effective Property Tax Rate: 0.62%
- Median Home Value: $196,000
- Median Real Estate Tax Paid: $1,223
◾ Maine Property Tax
- Effective Property Tax Rate: 1.29%
- Median Home Value: $223,100
- Median Real Estate Tax Paid: $2,868
◾ Maryland Property Tax
- Effective Property Tax Rate: 1.07%
- Median Home Value: $346,500
- Median Real Estate Tax Paid: $3,709
◾ Massachusetts Property Tax
- Effective Property Tax Rate: 1.19%
- Median Home Value: $159,200
- Median Real Estate Tax Paid: $1,289
◾ Mississippi Property Tax
- Effective Property Tax Rate: 0.81%
- Median Home Value: $159,200
- Median Real Estate Tax Paid: $1,289
◾ Missouri Property Tax
- Effective Property Tax Rate: 1.00%
- Median Home Value: $183,900
- Median Real Estate Tax Paid: $1,830
◾ Montana Property Tax
- Effective Property Tax Rate: 0.83%
- Median Home Value: $282,200
- Median Real Estate Tax Paid: $2,339
◾ Nebraska Property Tax
- Effective Property Tax Rate: 1.70%
- Median Home Value: $187,700
- Median Real Estate Tax Paid: $3,184
◾ Nevada Property Tax
- Effective Property Tax Rate: 0.55%
- Median Home Value: $325,300
- Median Real Estate Tax Paid: $1,793
◾ New Hampshire Property Tax
- Effective Property Tax Rate: 2.09%
- Median Home Value: $297,900
- Median Real Estate Tax Paid: $6,235
◾ New Jersey Property Tax
- Effective Property Tax Rate: 2.46%
- Median Home Value: $363,400
- Median Real Estate Tax Paid: $8,928
◾ New Mexico Property Tax
- Effective Property Tax Rate: 0.84%
- Median Home Value: $204,400
- Median Real Estate Tax Paid: $1,721
◾ New York Property Tax
- Effective Property Tax Rate: 1.73%
- Median Home Value: $359,600
- Median Real Estate Tax Paid: $6,217
◾ North Carolina Property Tax
- Effective Property Tax Rate: 0.80%
- Median Home Value: $220,000
- Median Real Estate Tax Paid: $1,765
◾ North Dakota Property Tax
- Effective Property Tax Rate: 1.02%
- Median Home Value: $233,300
- Median Real Estate Tax Paid: $2,378
◾ Ohio Property Tax
- Effective Property Tax Rate: 1.57%
- Median Home Value: $169,200
- Median Real Estate Tax Paid: $2,658
◾ Oklahoma Property Tax
- Effective Property Tax Rate: 0.99%
- Median Home Value: $164,500
- Median Real Estate Tax Paid: $1,623
◾ Oregon Property Tax
- Effective Property Tax Rate: 0.92%
- Median Home Value: $373,900
- Median Real Estate Tax Paid: $3,457
◾ Pennsylvania Property Tax
- Effective Property Tax Rate: 1.56%
- Median Home Value: $215,300
- Median Real Estate Tax Paid: $3,352
◾ Rhode Island Property Tax
- Effective Property Tax Rate: 1.54%
- Median Home Value: $293,100
- Median Real Estate Tax Paid: $4,526
◾ South Carolina Property Tax
- Effective Property Tax Rate: 0.58%
- Median Home Value: $207,400
- Median Real Estate Tax Paid: $1,213
◾ South Dakota Property Tax
- Effective Property Tax Rate: 1.22%
- Median Home Value: $207,700
- Median Real Estate Tax Paid: $2,528
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◾ Tennessee Property Tax
- Effective Property Tax Rate: 0.65%
- Median Home Value: $211,700
- Median Real Estate Tax Paid: $1,376
◾ Texas Property Tax
- Effective Property Tax Rate: 1.90%
- Median Home Value: $232,000
- Median Real Estate Tax Paid: $4,399
◾ Utah Property Tax
- Effective Property Tax Rate: 0.57%
- Median Home Value: $345,300
- Median Real Estate Tax Paid: $1,972
◾ Vermont Property Tax
- Effective Property Tax Rate: 1.89%
- Median Home Value: $248,700
- Median Real Estate Tax Paid: $4,706
◾ Virginia Property Tax
- Effective Property Tax Rate: 0.83%
- Median Home Value: $321,200
- Median Real Estate Tax Paid: $2,656
◾ Washington Property Tax
- Effective Property Tax Rate: 0.93%
- Median Home Value: $414,300
- Median Real Estate Tax Paid: $3,841
◾ West Virginia Property Tax
- Effective Property Tax Rate: 0.59%
- Median Home Value: $156,000
- Median Real Estate Tax Paid: $916
◾ Wisconsin Property Tax
- Effective Property Tax Rate: 1,71%
- Median Home Value: $208,900
- Median Real Estate Tax Paid: $3,570
◾ Wyoming Property Tax
- Effective Property Tax Rate: 0.61%
- Median Home Value: $247,600
- Median Real Estate Tax Paid: $1,501
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