As the costs associated with owning a home keep rising, property taxes have become so unpopular that there is a long list of states trying to reduce or reform them.
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taxes → associate → them
Property tax relief bills will hit ballots this November in Florida, Louisiana, North Carolina, Oklahoma, Tennessee, and Wyoming.
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bills → hit → Florida
Then there are the five states where the effective property tax rate on owner-occupied property falls below half a percentage point, or less than 0.50%.
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rate → be → point
According to a Tax Foundation report, these five states have the lowest effective tax rates of the 50 states for 2024 (the most recent data available) and all, except Alabama, were even slightly lower than they were the year before.
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they → accord → Alabama
This doesn’t necessarily mean that these states will always have the lowest property tax bills, which are tied to the value of a property.
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which → mean → property
Higher assessments can mean higher tax bills, even with a lower tax rate.
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assessments → mean → rate
“Since home values vary significantly across counties, it is also important to compare effective tax burdens (the median property tax paid divided by the median value of owner-occupied housing units),” writes Janelle Fritz in the report.
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Fritz → vary → report
“Because property taxes are assessed as a percentage of home values, it follows that higher property taxes are paid in places with higher housing prices.”
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taxes → assess → prices
Low tax rates and low tax bills
Property taxes, which fund infrastructure and services such as schools, police, and fire departments, are set not only by cities and counties, but also by school boards, fire departments, and utility commissions, says the report.
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report → fund → boards
Just because valuations rise, that doesn’t mean that tax rates do as well.
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rates → rise → ?
“If homes in a community doubled in value but nothing else in the economy changed, local government wouldn’t necessarily need to capture twice as much revenue,” says the report.
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report → double → revenue
Additionally, tax rates across counties can differ dramatically.
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rates → differ → counties
For example, the median property tax bill in Buchanan County, VA, is about $404 compared to more than $10,000 in Falls Church City, VA, which is considered part of the Washington metropolitan area.
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which → compare → area
Urban cores tend to have higher property taxes.
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cores → tend → taxes
The state that ranks lowest for property tax rates is Hawaii.
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that → rank → rates
Yet, Honolulu County’s median annual property tax bill is $2,553, much higher than Buchanan County’s $404, despite Virginia having a higher effective tax rate of .78%.
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Virginia → have → %
Due to Hawaii’s generally high property valuations, tax bills don’t tend to be a bargain.
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bills → tend → valuations
Still, an expensive home in Honolulu is typically going to have a lower tax bill than a comparable one in New Jersey, which has the highest effective tax rate in the country at 1.88%.
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which → go → %
New Jersey is tied with Illinois, then followed by Connecticut (1.54%), Vermont (1.54%), and new Hampshire (1.50%).
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Jersey → tie → Connecticut
Even Texas—considered a low-tax state due to having no personal income or corporate income tax—ranks high at No. 7 with an effective property tax rate of 1.40%.
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Texas → consider → %
As home prices throughout the country have soared in the past five or so years, so have property tax bills, even in places with low effective tax rates.
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bills → soar → rates
According to the Federal Reserve Bank of St. Louis, the median sales price for a home has reached $410,700 in the second quarter of 2026—a nearly 30% increase since the second quarter of 2020.
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price → accord → 2020
How low taxes are affecting real estate
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taxes → affect → estate
Low tax rates help lure buyers to an area—especially from states with higher taxes, say experts.
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experts → lure → taxes
South Carolina, ranked No. 46 in the country, with one of the lowest effective tax rates, brings in buyers from New York, Connecticut, and California, says Charleston County real estate agent Leslie Turner, cofounder of Maison Real Estate.
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Turner → rank → Estate
“Many buyers who are moving to South Carolina from other states mention that the property taxes are much lower here versus their home state,” she tells Realtor.com®.
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she → move → Realtor.com
However, the broker says she has to “educate” most buyers on the Southern state’s “two-tiered property tax system,” where primary residences are taxed lower than non-owner-occupied homes such as vacation homes or rental properties.
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residences → say → homes
“A property in downtown Charleston with an assessed value of $1,000,000 would have annual property taxes of approximately $4,584, if classified as a primary residence,” she says.
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she → assess → residence
“If the same $1 million property was classified as a second home or investment property, the annual property taxes would be about $16,246.”
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taxes → classify → home
She also says some counties have seen exponential tax rate increases.
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counties → say → increases
“Our property values have been increasing steadily for many years, with many areas seeing an 80%-90% increase in the past six years,” she notes.
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she → increase → years
However, the broker stresses that since values are so much lower than in states like New York, “buyers feel they are getting a good value for their investment.”
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they → stress → investment
She notes that since property taxes are lower, the money to fund local services needs to come from somewhere else—and in Charleston County’s case, that is sales tax, which is around 9%.
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which → note → case
“The beauty of a higher sales tax here is that tourists contribute a fair amount to the state, and the tax burden is not just on residents,” she says.
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she → contribute → residents
Another South Carolina broker, Justin Winter of Forbes Global Properties, says that the lower tax rate is helping push home values up.
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rate → say → values
“Low property tax rates drive interest which results in sales,” he tells Realtor.com.
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he → drive → Realtor.com
“Sales result in higher prices.”
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Sales → result → prices
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Report → start → news
And he notes a correlation between the lower property tax rate and who is moving in state, especially with the No. 2 ranked state, Illinois.
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who → note → state
“The state that sends us the greatest number of transplants is Illinois,” he says.
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he → send → transplants
…and 9 more, not listed.
The Aporia
