Property taxes by state.

The single biggest variable cost in homeownership that buyers consistently underweight is property tax. Most calculators treat it as a flat percentage of price — but the actual percentage depends entirely on where you buy, and the spread is much wider than people expect. A $400,000 home generates a $1,320 annual tax bill in Hawaii and a $7,360 bill in Illinois. That's a difference of $503 per month, every month, for as long as you own the home.

This page is the geographic complement to property tax explained, which covers the mechanics. Here we focus on the variation itself: which states sit where, what drives the differences, and how to translate the state averages into a realistic projection for the specific home you're considering.

The national picture

The national effective rate has been rising for two reasons: local government revenue needs growing faster than home values, and home values themselves declining slightly (1.7% in 2025 per ATTOM) while tax levies kept climbing. Effective rate = bill ÷ value, so when value drops and bill rises, the rate jumps. This is happening simultaneously in most regions.

The three tiers most states fall into

State rankings — effective tax rate

Per ATTOM's 2025 property tax analysis, released April 2026. The "effective tax rate" is the average annual tax bill divided by the average estimated home value in each state — the apples-to-apples comparison number.

Effective rate vs. dollar bill — they tell different stories

Effective rate compares fairly across states because it accounts for home values. But the actual dollar bill is what hits your monthly payment, and the ranking shifts meaningfully when you look at dollars instead of percentages. Hawaii has the lowest effective rate in the country (0.33%) but a typical bill of $2,183 because home values are so high (median $808,200). West Virginia has a higher effective rate (0.48%) but a much lower typical bill ($1,081) because home values are lower.

For affordability planning on a specific home, dollars are what matters. The effective rate ranking helps you compare states; the dollar ranking helps you set expectations once you know the price.

What drives the variation

School funding structure

The single biggest driver. Northeast and Midwest states fund public education primarily through local property taxes — New Jersey is the most extreme example, with public schools relying almost entirely on local property tax revenue. States that fund education through state-level sources (sales taxes, income taxes, severance taxes on natural resources) keep local property taxes lower. Hawaii's schools are state-funded, which is the main reason its property taxes are the lowest in the country despite high home values.

Other revenue sources available

States with significant alternative revenue (tourism, oil, severance taxes on mining) lean less on property tax. Wyoming's energy industry funds a large share of state revenue. Alaska has historically used oil revenue for both state services and Permanent Fund dividends to residents. Florida's tourism industry generates meaningful state revenue. Nevada's gaming industry plays a similar role. In all these states, residents benefit from lower property tax burden because the load is being carried by industries that pay other taxes.

Reliance on state income tax

States with no state income tax (Texas, Florida, Tennessee, Nevada, South Dakota, Wyoming, Washington, Alaska, plus New Hampshire which only taxes investment income) collect revenue elsewhere. Texas is the highest-property-tax state with no income tax — those revenue dollars have to come from somewhere. Florida and Nevada lean more on tourism. The "no income tax" pitch is real but partial: total state tax burden can still be high through property tax and sales tax.

Local government services

States with extensive county-level services (fire, sheriff, road maintenance, parks, libraries) typically have higher property taxes because counties have spending obligations. States that consolidate services at higher levels of government often run lower. This shows up in the bill but can be invisible to outsiders — Illinois' high rates partly reflect that municipalities, school districts, park districts, library districts, and community college districts can all separately tax the same property.

The post-purchase reset — the biggest practical issue

In most states, the assessor resets the property's assessed value to the sale price after a sale. The listing's tax estimate is usually based on the prior owner's assessment — which may be years out of date and meaningfully below market. The new tax bill can be 30-60% higher than what the listing shows. This is the single most common reason new owners are surprised by their tax bill.

The reset is most aggressive in states where assessments are updated annually (Texas, Florida, Illinois, much of the Northeast). It's more muted in states with limits on annual assessment increases — California's Proposition 13 caps annual increases at 2% but resets on sale, so the post-purchase jump can be enormous if the prior owner held the home for decades. Some states (Michigan, Oregon) have similar but less restrictive caps.

For affordability planning, use the post-purchase rate, not the seller's historical bill. Apply the state effective rate (or the county effective rate if you can find it) to the home's actual sale price. That gives you the right number. The True Monthly Cost calculator and the Listing Reality Check both apply this automatically.

How geography changes affordability

On a $400,000 home with 10% down at 6.75% over 30 years, P&I alone is $2,335/month. Layer property tax onto that and the picture changes meaningfully by state:

That $503/month gap between Hawaii and Illinois translates to about $35,000 less house you can afford at the Illinois end of the range (at typical qualifying ratios). State property tax variation is one of the biggest reasons "the same income" buys meaningfully different homes in different parts of the country.

The takeaways

• Use the post-purchase rate, not the seller's history. Listing-site tax estimates are usually based on the prior owner's bill and will be wrong after closing.
• Effective rate ranks fairly across states; dollar bill ranks fairly within your price range. Both matter for different parts of the decision.
• "No state income tax" doesn't always mean lower total taxes. Texas trades income tax for property tax; whether you come out ahead depends on your income relative to your home value.
• Apply for the homestead exemption. It doesn't apply automatically — you have to file. Worth $300-$2,500/year depending on state.
• Appeals are often worthwhile in high-rate states. A 10% assessment reduction saves $300-$1,500/year. The process is more accessible than people assume.

Common questions about state property taxes