Evan Comen

January 31, 2018

Property taxes are the primary source of tax revenue for the majority of state and local governments, comprising 31.3% of collections nationwide. Property taxes support public education, police and fire protection, local government operations, and other local infrastructure. While nearly every municipality levies some form of property tax, tax burdens vary widely across states.

To determine the states with the highest and lowest property taxes, 24/7 Wall St. reviewed the effective property tax rate – the total amount of property taxes paid in 2015 as a percentage of the total value of all occupied homes – for all 50 states with data from the Tax Foundation.

Nationwide, the average property tax amounts to 1.1% of the value of the average U.S. home. Effective property tax rates range from 0.3% in Hawaii to 2.1% in New Jersey.

Unlike other major types of taxes, property taxes tend to be the principal revenue source for local government. This means taxpayers can more easily observe the services their money is funding. Discussing the local aspect of property taxation in an interview with 24/7 Wall St., Nicole Kaeding, director of special products at the Tax Foundation, said, “Sometimes individuals are willing to pay higher taxes for government services.”

A good example is education spending. In 17 of the 25 states with the highest effective property tax rates, per-pupil school funding exceeds the national average. This is the case in only eight of the 25 states with the lowest effective property tax rates.

50. Hawaii

Effective property tax rate: 0.3%
Median home value: $592,000 (the highest)
Per capita property tax collections: $980 (17th lowest)
Median household income: $74,511 (5th highest)

49. Alabama > Effective property tax rate: 0.4%

Median home value: $136,200 (7th lowest)
Per capita property tax collections: $522 (the lowest)
Median household income: $46,257 (5th lowest)

48. Louisiana > Effective property tax rate: 0.5%

Median home value: $158,000 (16th lowest)
Per capita property tax collections: $839 (8th lowest)
Median household income: $45,146 (4th lowest)

47. West Virginia > Effective property tax rate: 0.5%

Median home value: $117,900 (2nd lowest)
Per capita property tax collections: $852 (9th lowest)
Median household income: $43,385 (2nd lowest)

46. Wyoming > Effective property tax rate: 0.5%

Median home value: $209,500 (21st highest)
Per capita property tax collections: $2,109 (9th highest)
Median household income: $59,882 (19th highest)

45. South Carolina > Effective property tax rate: 0.5%

Median home value: $153,900 (14th lowest)
Per capita property tax collections: $1,080 (19th lowest)
Median household income: $49,501 (10th lowest)

44. Colorado > Effective property tax rate: 0.6%

Median home value: $314,200 (5th highest)
Per capita property tax collections: $1,365 (23rd highest)
Median household income: $65,685 (12th highest)

43. Delaware > Effective property tax rate: 0.6%

Median home value: $243,400 (16th highest)
Per capita property tax collections: $828 (6th lowest)
Median household income: $61,757 (15th highest)

42. Arkansas > Effective property tax rate: 0.6%

Median home value: $123,300 (3rd lowest)
Per capita property tax collections: $675 (3rd lowest)
Median household income: $44,334 (3rd lowest)

41. Mississippi > Effective property tax rate: 0.6%

Median home value: $113,900 (the lowest)
Per capita property tax collections: $916 (10th lowest)
Median household income: $41,754 (the lowest)

40. Utah > Effective property tax rate: 0.6%

Median home value: $250,300 (14th highest)
Per capita property tax collections: $969 (15th lowest)
Median household income: $65,977 (11th highest)

39. New Mexico > Effective property tax rate: 0.7%

Median home value: $167,500 (21st lowest)
Per capita property tax collections: $731 (4th lowest)
Median household income: $46,748 (7th lowest)

38. Arizona > Effective property tax rate: 0.7%

Median home value: $205,900 (22nd highest)
Per capita property tax collections: $986 (18th lowest)
Median household income: $53,558 (20th lowest)

37. Nevada > Effective property tax rate: 0.7%

Median home value: $239,500 (17th highest)
Per capita property tax collections: $953 (13th lowest)
Median household income: $55,180 (24th lowest)

36. California > Effective property tax rate: 0.7%

Median home value: $477,500 (2nd highest)
Per capita property tax collections: $1,385 (22nd highest)
Median household income: $67,739 (9th highest)

35. Tennessee > Effective property tax rate: 0.7%

Median home value: $157,700 (15th lowest)
Per capita property tax collections: $830 (7th lowest)
Median household income: $48,547 (8th lowest)

34. Idaho > Effective property tax rate: 0.7%

Median home value: $189,400 (24th highest)
Per capita property tax collections: $928 (11th lowest)
Median household income: $51,807 (15th lowest)

33. Montana > Effective property tax rate: 0.7%

Median home value: $217,200 (19th highest)
Per capita property tax collections: $1,465 (17th highest)
Median household income: $50,027 (11th lowest)

32. Kentucky > Effective property tax rate: 0.8%

Median home value: $135,600 (6th lowest)
Per capita property tax collections: $737 (5th lowest)
Median household income: $46,659 (6th lowest)

31. North Carolina > Effective property tax rate: 0.8%

Median home value: $165,400 (19th lowest)
Per capita property tax collections: $951 (12th lowest)
Median household income: $50,584 (12th lowest)

30. Oklahoma > Effective property tax rate: 0.8%

Median home value: $132,200 (4th lowest)
Per capita property tax collections: $623 (2nd lowest)
Median household income: $49,176 (9th lowest)

29. Virginia > Effective property tax rate: 0.8%

Median home value: $264,000 (12th highest)
Per capita property tax collections: $1,457 (18th highest)
Median household income: $68,114 (8th highest)

28. Indiana > Effective property tax rate: 0.8%

Median home value: $134,800 (5th lowest)
Per capita property tax collections: $970 (16th lowest)
Median household income: $52,314 (16th lowest)

27. North Dakota > Effective property tax rate: 0.9%

Median home value: $184,100 (24th lowest)
Per capita property tax collections: $1,121 (21st lowest)
Median household income: $60,656 (17th highest)

26. Georgia > Effective property tax rate: 0.9%

Median home value: $166,800 (20th lowest)
Per capita property tax collections: $1,087 (20th lowest)
Median household income: $53,559 (21st lowest)

25. Washington > Effective property tax rate: 0.9%

Median home value: $306,400 (7th highest)
Per capita property tax collections: $1,364 (24th highest)
Median household income: $67,106 (10th highest)

24. Florida > Effective property tax rate: 0.9%

Median home value: $197,700 (23rd highest)
Per capita property tax collections: $1,184 (22nd lowest)
Median household income: $50,860 (13th lowest)

23. Alaska > Effective property tax rate: 1.0%

Median home value: $267,800 (11th highest)
Per capita property tax collections: $2,639 (4th highest)
Median household income: $76,440 (2nd highest)

22. Oregon > Effective property tax rate: 1.0%

Median home value: $287,100 (9th highest)
Per capita property tax collections: $1,350 (25th highest)
Median household income: $57,532 (21st highest)

21. Missouri > Effective property tax rate: 1.0%

Median home value: $151,400 (13th lowest)
Per capita property tax collections: $960 (14th lowest)
Median household income: $51,746 (14th lowest)

20. Maryland > Effective property tax rate: 1.0%

Median home value: $306,900 (6th highest)
Per capita property tax collections: $1,491 (16th highest)
Median household income: $78,945 (the highest)

19. Minnesota > Effective property tax rate: 1.1%

Median home value: $211,800 (20th highest)
Per capita property tax collections: $1,411 (20th highest)
Median household income: $65,599 (13th highest)

18. Massachusetts > Effective property tax rate: 1.1%

Median home value: $366,900 (3rd highest)
Per capita property tax collections: $2,181 (8th highest)
Median household income: $75,297 (4th highest)

17. South Dakota > Effective property tax rate: 1.2%

Median home value: $160,700 (17th lowest)
Per capita property tax collections: $1,301 (24th lowest)
Median household income: $54,467 (22nd lowest)

16. Maine > Effective property tax rate: 1.2%

Median home value: $184,700 (25th lowest)
Per capita property tax collections: $1,918 (11th highest)
Median household income: $53,079 (19th lowest)

15. Kansas > Effective property tax rate: 1.3%

Median home value: $144,900 (10th lowest)
Per capita property tax collections: $1,435 (19th highest)
Median household income: $54,935 (23rd lowest)

14. New York > Effective property tax rate: 1.4%

Median home value: $302,400 (8th highest)
Per capita property tax collections: $2,581 (5th highest)
Median household income: $62,909 (14th highest)

13. Michigan > Effective property tax rate: 1.4%

Median home value: $147,100 (11th lowest)
Per capita property tax collections: $1,335 (25th lowest)
Median household income: $52,492 (18th lowest)

12. Iowa > Effective property tax rate: 1.4%

Median home value: $142,300 (9th lowest)
Per capita property tax collections: $1,525 (15th highest)
Median household income: $56,247 (25th lowest)

11. Pennsylvania > Effective property tax rate: 1.5%

Median home value: $174,100 (23rd lowest)
Per capita property tax collections: $1,405 (21st highest)
Median household income: $56,907 (23rd highest)

10. Rhode Island > Effective property tax rate: 1.5%

Median home value: $247,700 (15th highest)
Per capita property tax collections: $2,307 (7th highest)
Median household income: $60,596 (18th highest)

9. Ohio > Effective property tax rate: 1.6%

Median home value: $140,100 (8th lowest)
Per capita property tax collections: $1,203 (23rd lowest)
Median household income: $52,334 (17th lowest)

8. Nebraska > Effective property tax rate: 1.6%

Median home value: $148,100 (12th lowest)
Per capita property tax collections: $1,757 (12th highest)
Median household income: $56,927 (22nd highest)

7. Texas > Effective property tax rate: 1.6%

Median home value: $161,500 (18th lowest)
Per capita property tax collections: $1,635 (14th highest)
Median household income: $56,565 (25th highest)

6. Connecticut > Effective property tax rate: 1.7%

Median home value: $274,600 (10th highest)
Per capita property tax collections: $2,774 (3rd highest)
Median household income: $73,433 (6th highest)

5. Vermont > Effective property tax rate: 1.7%

Median home value: $223,700 (18th highest)
Per capita property tax collections: $2,339 (6th highest)
Median household income: $57,677 (20th highest)

4. Wisconsin > Effective property tax rate: 1.7%

Median home value: $173,200 (22nd lowest)
Per capita property tax collections: $1,657 (13th highest)
Median household income: $56,811 (24th highest)

3. Illinois > Effective property tax rate: 2.0%

Median home value: $186,500 (25th highest)
Per capita property tax collections: $2,007 (10th highest)
Median household income: $60,960 (16th highest)

2. New Hampshire > Effective property tax rate: 2.0%

Median home value: $251,100 (13th highest)
Per capita property tax collections: $2,861 (2nd highest)
Median household income: $70,936 (7th highest)

1. New Jersey > Effective property tax rate: 2.1%

Median home value: $328,200 (4th highest)
Per capita property tax collections: $3,065 (the highest)
Median household income: $76,126 (3rd highest)

States collect property taxes in a variety of ways. Some states impose a millage, charging a tax amount per thousand dollars on the fair market value of a property. Other states may only charge taxes on a percentage of the property's assessed market value. States also have different rules as to how property taxes are charged throughout their municipalities – some require uniform taxes throughout the state, some impose caps on how much property taxes can rise in a year, and some also offer tax abatements for veterans and senior citizens.

As Kaeding noted, each state has its own unique blend of taxes to maintain a balanced accounting. So states with low property tax rates do not necessarily have low tax burdens overall.

In California, for example, state and local property taxes amount to just 0.7% of the total value of all occupied housing units in the state, far less than the 1.1% national figure. Still, California residents paid $5,237 per capita in taxes in fiscal 2012, which amounted to 11.0% of the average resident’s income that year – both figures some of the highest of any state. New Hampshire, which has the second highest property tax rate in the country, has one of the lowest overall tax burdens of any state.

Most states with low property tax rates compensate by levying taxes on other assets. While on average property tax is the largest source of state and local tax revenue nationwide, it is the primary source of state and local tax revenue in just 8 of the 32 states with effective property tax rates below the 1.1% national figure. In Hawaii, Alabama, and Louisiana – the states with the three lowest property tax rates – sales taxes comprise the lion’s share of state and local tax revenues. In Utah and California, which also have some of the lower property tax rates of any state, individual income taxes are the primary source of state and local tax revenues.

When accounting for sales, income, and other taxes, just three of the states with the top 10 lowest property tax rates – South Carolina, Louisiana, and Wyoming – are also among the top 10 states with the lowest tax burdens overall.

According to the Tax Foundation, urban areas often have the largest tax burdens.

The three states with the highest tax burdens overall are New York, Connecticut, and New Jersey – which are some of the most urban states in the country.

To determine the states with the highest and lowest property taxes, 24/7 Wall St. reviewed the effective property tax rate for the 2015 calendar year for all 50 states with data from the Tax Foundation. The effective property tax rate is the total amount of real property taxes paid in 2015 as a percentage of the total value of all owner-occupied housing units. Taxes paid by businesses, renters, and others were excluded from the Tax Foundation’s calculation. Total state and local tax collections per capita for fiscal 2012, state and local tax collections per capita as a share of income for fiscal 2012, and the source of tax collections by tax type for fiscal 2014 also came from the Tax Foundation. Data on median home value and median household income are for 2016 and came from the U.S. Census Bureau’s American Community Survey. All data are for the most recent period available.

3/9/2019

<datatables>

</datatables>

With the ultra-generous $11.58 million federal estate tax exemption for 2020 (effectively doubled if you’re married), most folks are currently free of any federal estate tax worries. Events and politics could change that. Or not. Who knows?

That’s the good news. The bad news: For 2020, 17 states and the District of Columbia impose their own estate tax or inheritance tax. Maryland imposes both. Exemptions from these state death taxes are far below the ultra-generous federal estate tax exemption. So, if you have a healthy estate and move to the “wrong” place, your estate could be completely exempt from any federal estate tax hit (under the current rules) but badly exposed to a significant state death tax hit. Not good!

What’s the difference between an estate tax and an inheritance tax? Good question. An estate tax is charged against your entire taxable estate, regardless of who the beneficiaries of the estate may be. An inheritance tax is only charged against inheritances received by certain categories of beneficiaries.

With those thoughts in mind, here’s the state death tax picture for 2020 in alphabetical order.

Connecticut The top estate tax rate is 12%. For 2020 a $5.1 million exemption is allowed. The exemption is scheduled to increase to $7.1 million for 2021 and $9.1 million for 2022. Above $15 million of estate tax value, the tax rate drops to 0%.

Hawaii The top estate tax rate is 20%. For 2020 a $5.49 million exemption is allowed.

Illinois The top estate tax rate is 16%. For 2020, a $4 million exemption is allowed.

Iowa No estate tax, but an inheritance tax ranges from 5% to 15%, depending on the size of the estate and the beneficiary in question. For 2020, a $25,000 exemption is allowed.

Kentucky No estate tax, but an inheritance tax ranges from 4% to 16%. Members of the most-common class of beneficiaries (surviving spouse, child, parent, etc.) are exempt. Tiny exemptions are allowed for members of other classes of beneficiaries.

Maine The top estate tax rate is 12%. For 2020, a $5.8 million exemption is allowed.

Maryland A good choice for folks who love to pay taxes, because Maryland has both an estate tax and an inheritance tax. The top estate tax rate is 16%. For 2020, a $5 million exemption is allowed. The separate inheritance tax is imposed at a 10% rate, with the taxable amount based on how closely related the beneficiary is to the decedent (that would be you).

Massachusetts The top estate tax rate is 16%. For 2020, a $1 million exemption is allowed.

Minnesota The top estate tax rate is 16%. For 2020, a $3 million exemption is allowed.

Nebraska No estate tax, but an inheritance tax is imposed with a top rate of 18%. Surviving spouses are exempt. For 2020, exemptions range from $10,000 to $40,000, depending on the relationship between the beneficiary and the decedent (you).

New Jersey No estate tax, but there’s an inheritance tax with a top rate of 16%. Surviving spouses, parents, grandparents, and direct descendants are exempt.

New York The top estate tax rate is 16%. For 2020, a $5.85 million exemption is allowed.

Oregon The top estate tax rate is 16%. For 2020, a $1 million exemption is allowed.

Pennsylvania No estate tax, but the inheritance tax rate ranges from 4.5% to 15%, depending on the relationship between the beneficiary and the decedent (you). Surviving spouses are exempt.

Rhode Island The top estate tax rate is 16% For 2020, a $1,579,922 exemption is allowed.

Vermont The estate tax rate is a flat 16%. For 2020, a $4.25 million exemption is allowed.

Washington The top estate tax rate is 20%. For 2020, a $2.193 million exemption is allowed.

Washington, D.C. The top estate tax rate is 16%. For 2020, a $5,762,400 exemption is allowed.

Other states have no death taxes States that are not listed above have no estate or inheritance taxes for 2020. Keep that in mind!

Another example As stated earlier, you must look at the whole tax picture before concluding that you’ll be moving to a state that has lower taxes in your specific circumstances. For example, Washington State has no personal state income tax. Terrific! But it has an estate tax that could cost big bucks if you die there, and the combined state land local sales tax rate can be as high as 10.4% So is Washington really a low-tax state? Maybe not for you. In contrast, Florida has no personal income tax, no death taxes, and relatively low sales taxes in many jurisdictions.

The bottom line Consider all applicable taxes before concluding that moving to another state will actually save taxes in your specific situation. Finally, consider the distinct possibility that some states may raise taxes in response to lower tax revenues and higher spending due to the COVID-19 mess. I think that’s more likely to happen in already-high-tax states than in lower-tax states. Just my opinion.

2. Hawaii Total tax burden: 12.19% Property tax burden: 2.45% Individual income tax burden: 3.09% Total sales & excise tax burden: 6.65% (highest)

10. California Total tax burden: 9.48% Property tax burden: 2.64% Individual income tax burden: 3.78% Total sales & excise tax burden: 3.06%

24. (tie) Washington Total tax burden: 8.34% Property tax burden: 2.65% Individual income tax burden: 0.00% (lowest) Total sales & excise tax burden: 5.69%

26. Colorado Total tax burden: 8.31% Property tax burden: 2.76% Individual income tax burden: 2.26% Total sales & excise tax burden: 3.29%

27. (tie) Utah Total tax burden: 8.29% Property tax burden: 2.30% Individual income tax burden: 2.73% Total sales & excise tax burden: 3.26%

27. (tie) Oregon Total tax burden: 8.29% Property tax burden: 3.06% Individual income tax burden: 4.17% Total sales & excise tax burden: 1.06% (lowest)

29. Nevada Total tax burden: 8.23% Property tax burden: 2.12% Individual income tax burden: 0.00% (lowest) Total sales & excise tax burden: 6.11%

30. (tie) Texas Total tax burden: 8.19% Property tax burden: 3.91% Individual income tax burden: 0.00% (lowest) Total sales & excise tax burden: 4.28%

30. (tie) Arizona Total tax burden: 8.19% Property tax burden: 2.53% Individual income tax burden: 1.43% Total sales & excise tax burden: 4.23%

36. Idaho Total tax burden: 7.88% Property tax burden: 2.32% Individual income tax burden: 2.38% Total sales & excise tax burden: 3.18%

37. Virginia Total tax burden: 7.86% Property tax burden: 2.93% Total sales & excise tax burden: 2.87% Individual income tax burden: 2.06%

38. North Dakota Total tax burden: 7.81% Property tax burden: 2.97% Individual income tax burden: 0.87% Total sales & excise tax burden: 3.97%

40. Montana Total tax burden: 7.45% Property tax burden: 3.59% Individual income tax burden: 2.58% Total sales & excise tax burden: 1.28%

43. South Dakota Total tax burden: 7.37% Property tax burden: 3.02% Individual income tax burden: 0.00% (lowest) Total sales & excise tax burden: 4.35%

45. Florida Total tax burden: 6.97% Property tax burden: 2.74% Individual income tax burden: 0.00% (lowest) Total sales & excise tax burden: 4.23%

48. Wyoming Total tax burden: 6.14% Property tax burden: 3.33% Individual income tax burden: 0.00% (lowest) Total sales & excise tax burden: 2.81%

49. Tennessee Total tax burden: 5.74% Property tax burden: 1.70% Individual income tax burden: 0.08% Total sales & excise tax burden: 3.96%

50. Alaska Total tax burden: 5.10% Property tax burden: 3.68% Individual income tax burden: 0.00% (lowest) Total sales & excise tax burden: 1.42%