The States With the Lowest Real Estate Taxes

Real estate taxes, also called property taxes, are among the many costs tied to homeownership, and they generally hinge on two components of property: location and value.

The tax rate is set by local governments, often by city or county, so rates vary within states. The cost is calculated as a percentage of the home’s value, so depending on the rate in effect, places with high home values do not necessarily pay the most in real estate taxes.

States With the Lowest Real Estate Taxes

Looking data from 2012 American Community Survey, it seems location matters more than home value when it comes taxes. The survey is an annual Census Bureau estimate of population, demographic and housing data, and we looked at each state’s median home values and median real estate tax payments for owner-occupied homes with mortgages.

Hawaii and the District of Columbia had the highest median home values, and West Virginia and Alabama had two of the lowest median home values in the country, but owners in all four of those states paid a very small portion of their home values in property taxes.

Using the median home values and median real estate tax payments in the 50 states and Washington, the median tax rates ranged between 0.29% to 2.4% across the nation. Based on those calculations, which were rounded to the nearest hundredth, the owners following 10 states paid the lowest property taxes in 2012:

1.Hawaii

• Median home value: $496,200
• Median real estate tax payment: $1,416
• Calculated tax rate: 0.29%

2. Alabama

• Median home value: $142,600
• Median real estate tax payment: $597
• Calculated tax rate: 0.42%

3. Louisiana

• Median home value: $158,300
• Median real estate tax payment: $819
• Calculated tax rate: 0.52%

4. Delaware

• Median home value: $233,500
• Median real estate tax payment: $1,322
• Calculated tax rate: 0.57%

5. South Carolina

• Median home value: $153,000
• Median real estate tax payment: $886
• Calculated tax rate: 0.58%

6. West Virginia

• Median home value: $119,900
• Median real estate tax payment: $711
• Calculated tax rate: 0.6%

7. District of Columbia

• Median home value: $464,200
• Median real estate tax payment: $2,833
• Calculated tax rate: 0.61%

8. Wyoming

• Median home value: $195,700
• Median real estate tax payment: $1,216
• Calculated tax rate: 0.62%

9. Arkansas

• Median home value: $121,300
• Median real estate tax payment: $762
• Calculated tax rate: 0.63%

10. Colorado

• Median home value: $240,500
• Median real estate tax payment: $1,539
• Calculated tax rate: 0.64%

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