10 states with the lowest real estate taxes in the US
Real estate taxes are one of the main sources of revenue for many local governments in the United States, used to invest in public projects such as building schools, hospitals, parks, roads and transportation systems. as well as pay salaries to officials and employees. Depending on each state’s policy, homebuyers will have to pay a fairly gentle property tax or sometimes a huge amount, which leaves many people stunned. Across the United States, the effective property tax rate (calculated by dividing taxes payable by home value) averaged 1.11% in 2018, according to data from the Tax Foundation, an international organization. tax policy research organization. For each state alone, Hawaii has the lowest tax rate in the country, only 0.3%, while New Jersey has the highest tax rate, up to 2.21%. Buying a home in low-tax states saves buyers and investors a significant amount of money.
Below is a list of the 10 lowest real estate tax states in the United States, including specific metrics such as effective property tax rates, median home prices, average annual home prices, and income. average household entry. In particular, the average house price and household income as of August 31, 2020, according to data from real estate company Zillow and a survey of the US Census Bureau.
1. Hawaii
Effective property tax rate: 0.30%
Median house price: 648,194 USD
Annual tax rate based on median house price: $1,945
Median household income: $83,102
Hawaii has the lowest effective property tax rate in the entire United States. However, the median home price here is also among the most expensive in the country, so homebuyers can still incur a hefty tax bill.
2. Alabama
Effective property tax rate: 0.40%
Median house price: 149,996 USD
Annual tax rate based on median house price: $600
Median household income: $51,734
Alabama has median home prices and relatively low tax rates, making it one of the most affordable states to own a home.
3. Louisiana
Effective property tax rate: 0.52% 4
Median house price: 171,504 USD
Annual tax rate based on median house price: $892
Median household income: $51,073.
Louisiana is also a state with both effective property tax rates and median home prices well below the national average.
4. Wyoming
Effective property tax rate: 0.55%
Median house price: $256,427
Annual tax rate based on median house price: $1,410
Median household income: $65,003
The median home price in Wyoming isn’t as low as some of the other states on this list. However, the lack of state income tax and a sales tax of just 4% make the state one of the most attractive real estate tax rates in the country.
5. West Virginia
Effective property tax rate: 0.55%
Median house price: $107,762
Annual tax rate based on median home price: $593
Median household income: $48,850
Low effective property tax rates and relatively affordable home prices in West Virginia attract many buyers and investors looking to “hunt” homes.
6. South Carolina
Effective property tax rate: 0.56%
Median house price: $196,857
Annual tax rate based on median house price: $1,102
Median household income: $56,227
South Carolina and Colorado have the same effective property tax rate of 0.56%, but significantly lower median home prices give South Carolina an advantage in attracting property buyers.
7. Colorado
Effective property tax rate: 0.56%
Median house price: $418,363
Annual tax rate based on median house price: $2,343
Median household income: $77,127
The effective property tax rate in Colorado is low but home prices are so high that buyers will expect to pay $2,343 for a median-priced home here – the highest on this list of 10 states. However, in return, the median household income in Colorado is second on the list, so the tax bill also seems somewhat more reasonable.
8. Delaware
Effective property tax rate: 0.58%
Median house price: 270,911 USD
Annual tax rate based on median house price: $1,571
Median household income: $70,167
The median home price in Delaware is quite high, so homeowners can expect to pay more property taxes. But similar to Colorado, Delaware has a high median household income, plus, the state doesn’t have a sales tax, so the cost of living here is quite affordable.
9. Utah
Effective property tax rate: 0.62%
Median house price: $373,049
Annual tax rate based on median house price: $2,313
Median household income: $75,780
The average annual property tax rate in Utah is among the highest on this list because effective taxes and home prices are both quite high. However, this tax rate is quite commensurate with household income here.
10. Arkansas
Effective property tax rate: 0.64%
Median house price: $135,958
Annual tax rate based on median house price: $870
Median household income: $48,952
In addition to the effective property tax rate and low house prices, Ankansas also attracts people looking for housing with a relatively low cost of living, lower than the national average. However, the state has a fairly high sales tax, averaging 9.7% – the third highest in the United States.
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