Property Taxes by State: 2024 Effective Rates and What They Actually Mean for Your Cash Flow

There is no single property tax rate that applies across an entire state. Property taxes are imposed almost entirely at the local level, so your county, city, school district, and any special districts all get a say in your bill. Local governments set the levies, county assessors set the values, and the state usually just sets the rules everyone plays by. That said, when you total up what owners actually pay and divide it by total owner-occupied housing value, using 2024 American Community Survey data, New Jersey and Illinois tie at the top at 1.88% after rounding, and Hawaii sits lowest at 0.29%.

If you own rental property, you’re buying in a new market, or you’re comparing where to put your next dollar, this is the piece you need: the full 50-state table of property taxes by state, the methodology behind the numbers (because rankings disagree for real reasons), and how to turn a state benchmark into an actual parcel-level number you can underwrite. We’re KT Rents, a full-service, broker-owned property management company operating nationwide since 2009, and we watch tax notices land across dozens of markets every year. The 2024 ACS figures below are the latest nationwide state-level data available as of publication.

Which states have the highest and lowest property taxes?

Here’s the short version you can lift and use.

Highest effective property tax rates (2024, aggregate method): New Jersey 1.88%, Illinois 1.88%, Connecticut 1.54%, Vermont 1.51%, and New Hampshire 1.50%.

Lowest effective property tax rates: Hawaii 0.29%, Alabama 0.37%, Utah 0.48%, Arizona 0.48%, and South Carolina 0.49%.

You may have seen New Jersey published at 2.11% and Hawaii at 0.27%. Those aren’t different facts. They’re the same 2024 data run through a different calculation, which we break down further below. Neither method is wrong, but they produce different numbers and slightly different rankings, so it matters which one you’re reading.

Now the part most rankings bury: a state rate is a benchmark for comparison, not a tax quote for a specific property. Real estate tax bills differ considerably from one county to the next inside the same state, and often from one school district to the next inside the same county. Use the table to narrow your search. Use the assessor’s website to price the deal.

Property taxes by state: complete 2024 table for all 50 states and the District of Columbia

The ranking below divides total real estate taxes paid by total owner-occupied housing value in each state, using 2024 American Community Survey data. That’s the aggregate method, and it’s the one we’ve chosen as this article’s primary ranking because it reflects the full dollar weight of property taxes paid against the full dollar value of housing rather than comparing two separate midpoints.

District of Columbia: 0.60%. D.C. isn’t a state, so we show it separately rather than folding it into the ranking. It would slot between New Mexico and Montana if you did fold it in, which surprises people who assume a dense urban jurisdiction automatically carries a heavy property tax burden.

Rates are rounded, so apparent ties may have small unrounded differences. Figures reflect owner-occupied housing only and exclude rental, commercial, and industrial property.

The middle of the pack: from New York to North Dakota

Most of the country lives in the middle of that table, and the middle is where the differences get subtle enough to matter to your model. New York comes in at 1.30%, Pennsylvania at 1.26%, and Michigan at 1.19%. Then a cluster sits right at the 1.00% line, with Massachusetts, Minnesota, and South Dakota all landing there. Maryland and North Dakota both post 0.92%, Missouri 0.89%, and Oregon 0.81%.

Two states can share an identical effective tax rate and still hand you very different bills, because the rate is applied to whatever the property value happens to be in that market. A 1.00% rate in a high-value metro produces a much larger annual payment than the same 1.00% rate in a market where the median home costs a third as much. The percentage tells you the intensity of the tax. Property value tells you the size of the check.

How to read the table: effective tax rate vs. what you actually pay

The percentage in that table is one number. Your check to the treasurer is a different number. Both matter, and they don’t move together the way most people assume.

What is an effective property tax rate?

An effective property tax rate is the tax liability divided by the property’s market value. A $2,000 bill on a $100,000 property is a 2% effective rate. Simple as that.

It’s not the same as the nominal or statutory rate, which is the stated rate before exemptions and assessment rules chew into it. The effective tax figure is the honest end-to-end number, because it measures what got paid against what the property is worth.

From market value to assessed value: where the mill rate fits in

Between fair market value and your bill sit two adjustments. First, the assessment ratio converts market value into assessed value. Second, exemptions come off the assessed value to produce taxable value. Only then does the rate get applied, and in most of the country that rate is expressed as a mill rate rather than a percentage, where one mill equals $1 per $1,000 of assessed value. A 20 mill rate on a $150,000 assessed value works out to $3,000 before any credits.

This is why a headline number from the assessor’s office can look nothing like the effective property tax rates in our table. A jurisdiction that assesses at 40% of market value and charges 50 mills is collecting the same money as one that assesses at 100% and charges 20 mills. Compare mill rates across counties without checking the assessment ratio behind each one and you will reach the wrong conclusion every time.

Why do other rankings show different property tax rates by state?

Two valid methods, same 2024 data, different outputs. The aggregate method (total taxes divided by total owner-occupied value) gives New Jersey 1.88%, Illinois 1.88%, and Hawaii 0.29%. The median-based method (median tax paid divided by median home value) gives New Jersey 2.11%, Illinois 2.01%, and Hawaii 0.27%. We use the aggregate method here and label it above the table so you always know what you’re looking at.

A third framing you’ll run into is a flat dollar figure, like an average annual amount of property taxes paid nationally. That’s useful context but it’s not a rate at all, and it can’t be compared to either percentage above.

States with the highest effective property tax rates

The top ten by effective rate: New Jersey (1.88%), Illinois (1.88%), Connecticut (1.54%), Vermont (1.51%), New Hampshire (1.50%), Nebraska (1.44%), Texas (1.40%), Ohio (1.36%), Iowa (1.33%), and Wisconsin (1.32%).

The pattern behind those numbers is mostly about how local governments get funded. Property taxes generated 28.9% of total state and local tax collections in fiscal year 2023 and a full 70.0% of local tax collections. That revenue pays for schools, roads, police and fire service, emergency response, parks, and the rest of the municipal budget. Where school districts are numerous and funded heavily through local levies rather than state aid, effective rates climb.

The other driver is what a state chooses not to tax. New Hampshire and Texas both go without a broad state individual income tax on wages, and both land in the top seven for property tax rates. Money for schools and services has to come from somewhere. When the income taxes lever isn’t available, the property tax lever gets pulled harder. Nebraska and Iowa show a different version of the same story: relatively modest home values combined with substantial local service and school funding needs push the effective percentage up even when the dollar bills aren’t extreme.

None of this makes a high-rate state a bad investment. Texas and Ohio move enormous volumes of rental housing every year. It does mean your underwriting model needs to carry a bigger tax line, and that reassessment risk deserves closer attention before you sign.

States with the lowest property taxes: where income taxes and local sales tax rates fill the gap

The bottom ten: Hawaii (0.29%), Alabama (0.37%), Utah (0.48%), Arizona (0.48%), South Carolina (0.49%), Idaho (0.50%), Colorado (0.50%), Nevada (0.50%), West Virginia (0.51%), and Tennessee (0.52%).

Here’s where the rate-versus-bill distinction earns its keep. Under the median-based 2024 data, Hawaii’s 0.27% rate produced a median annual real estate tax bill of $2,239, because the state’s median home value was $839,100. Alabama’s 0.38% rate, a higher percentage, produced a median bill of $788. The lower percentage cost nearly three times as much in dollars.

States with the lowest property taxes also tend to collect elsewhere. Some lean on individual and corporate income taxes. Others lean on sales taxes, where state and local sales tax rates stack on top of each other and quietly do a lot of the same work property taxes do in the Northeast and Midwest. A few collect severance revenue from natural resources and pass the benefit through to residents. Wyoming carries a 0.53% effective rate with no state individual income tax at all, which is a genuinely favorable combination for an owner, but the total tax burden in any state is broader than one line item.

And the state average hides a lot. Median annual bills across Alabama counties range from roughly a couple hundred dollars to well over $1,300 depending on where the parcel sits. That spread inside a single low-tax state is your preview of the next section.

How are property taxes calculated? From fair market value to your bill

Every jurisdiction runs some version of the same chain. Understanding the links tells you where your bill can change without the market moving at all.

• Market value. What the assessor believes the property would sell for. Often lagging actual sale prices, sometimes by years.
• Assessment ratio. The percentage of market value used to set assessed value. Some jurisdictions assess at 100%, others at a fraction, and many apply different ratios by property class.
• Assessed value. Market value multiplied by the assessment ratio.
• Exemptions. Homestead, senior, veteran, agricultural, and other reductions subtract from assessed value to produce taxable value. Most of them are tied to the owner, not the building.
• Combined tax rate or total millage. The sum of every taxing district’s levy. County, municipality, school district, library, fire district, and so on. One mill equals $1 per $1,000 of assessed value.
• Special assessments. Charges for sidewalks, sewer extensions, streetlights, or improvement districts. These ride on the same bill and are easy to miss.

Taxable value times the combined rate equals your bill. Two of those six inputs (the assessment ratio and the exemptions) can shift the day ownership changes hands, which is exactly why the previous owner’s bill is a starting point and not a forecast.

How assessors use comparable sales to set fair market value

For most residential parcels, the assessor arrives at fair market value through a mass appraisal built on comparable sales in the surrounding neighborhood. Recent arm’s-length transactions of similar homes get adjusted for square footage, lot size, condition, age, and features, then applied across a whole class of properties at once. It is a statistical exercise, not an individual appraisal, and that is precisely where errors creep in.

If your parcel is carrying a finished basement the county never had, or the comparable sales used were larger and more recently renovated, you have grounds for an appeal. Most jurisdictions give you a short window after the assessment notice arrives, and missing it means you pay property taxes on the inflated number for the full cycle. Pull the comparable sales the assessor relied on before you decide whether to contest. Sometimes the value is defensible and the appeal is a waste of your time. Sometimes it is off by tens of thousands.

Why property taxes belong at the top of your cash flow model

For a rental property, taxes are usually the single largest fixed operating expense after debt service, and unlike almost everything else on your ledger, you don’t control them. You control the rent you set, the vendors you hire, and how fast a vacancy gets filled. You do not control a countywide revaluation.

So build the tax line the same way every time. Start with the state benchmark from the table above to sanity-check the market. Then pull the actual parcel record from the county assessor, confirm the assessment ratio, subtract only the exemptions that will still apply after you own it (many homestead exemptions will not), and add any special assessments riding on the bill. Finally, stress-test the number. Ask what happens to your cash flow if the assessed value jumps on the next reassessment cycle. If the deal only works at today’s tax figure, it isn’t a deal, it’s a bet.

The flip side is the part owners tend to underweight: taxes are a fixed cost, and fixed costs are carried by occupied units. A vacant month doesn’t pause the levy. This is where management quality shows up in the math. KT Rents reports a 98% occupancy rate across our portfolio, and as of early 2025 we managed 683 units across 34 states representing $187M in assets under management. Those numbers exist because tenant placement, tenant screening, rent collection, property inspections, and yes, court evictions when it comes to that, all get handled without the owner having to lift a finger. High occupancy is what turns a heavy tax line into a survivable one.

Running the numbers before you buy

If you’re weighing markets right now, use the state table as your first filter, then get parcel-specific fast. Our Rent Calculator, Rent vs. Buy Calculator, and Mortgage Calculator at ktrents.com are free and will get you to a defensible monthly figure in a few minutes. Property taxes are one input. Rent, vacancy, maintenance, and management all sit right next to it.

And when the spreadsheet works but the operating headache doesn’t, that’s our department. We’re broker-owned, we’ve been at this since 2009, and we handle full-service management nationwide, from rental permits and 1099 preparation to city ordinance compliance, for roughly what the company likes to call the price of a cup of coffee and a donut per day. Worth it for no more headaches.

Ready to talk it through? Call us at (800) 716-4950, text (608) 207-0657, or email info@ktrents.com. We respond to form submissions within 24 hours. Se Habla Español.

This article is general information, not tax or legal advice. Property tax rules, exemptions, and appeal deadlines vary by jurisdiction. Confirm figures with your county assessor and consult a qualified tax professional before making an investment decision.