Property Taxes by State: Where Are You Paying the Most?

Key Takeaways:

• How Property Taxes Are Calculated: Each state applies its rules for assessed value, tax rates, and exemptions, leading to significant differences in how your bill is calculated.
• Factors Influencing Property Tax Rates: Local budget needs, real estate values, and voter-approved measures all impact what property owners pay from one area to the next.
• States with the Highest and Lowest Property Tax Rates: Based on Tax Foundation data, some states like Illinois and New Jersey top the list, while others like Hawaii and Alabama rank among the lowest.

If you’re a homeowner or commercial property owner, you’ve likely faced a wave of questions during property tax season. Who sets these numbers? Why do they vary so much from state to state, and more importantly, are you being overcharged?

For Texans, those questions often carry extra weight. Local assessments can feel like a maze of fine print and moving targets. Still, gaining clarity on how property taxes work within Texas and across state lines can help protect your wallet in the long run. Our team at Texas Tax Protest is here to simplify that process. In this article, you’ll explore how property taxes compare from state to state, why those differences exist, and how you can help keep your valuation in check. 

How Property Taxes Are Calculated: A State-by-State Breakdown

Property tax laws might sound similar across the country, but the way those bills are calculated can vary significantly based on where you live. Each state, and often each county, builds its framework from the ground up. That means your annual tax obligation depends on far more than your home’s price tag.

Assessing Property Value: Full vs. Fractional Ratios

Every state begins with an assessed value. This figure represents the taxable value of your property and acts as the foundation for your bill. In Texas, that number is typically based on 100% of your home’s market value. Appraisal districts review comparable sales and apply mathematical adjustments for property differences like square footage, age, upgrades, or location.

Compare that with California, where homes are usually reassessed only when sold. Thanks to Proposition 13, assessed values remain capped with limited annual increases, regardless of how much market values change. That creates significant differences between long-time homeowners and recent buyers on the same street. These assessment frequency and ratio differences explain why two homes with similar market values in different states might generate very different bills.

Local Tax Rates Add Another Layer

Once your assessed value is set, local taxing units apply their own rates. These rates are usually expressed as a percentage of the assessed value or as a dollar amount per $100. In Texas, school districts, counties, cities, and utility districts all add their own rates, which can push total taxes higher than homeowners expect.

Some states centralize tax rate control, while others (like Texas) grant more authority to local governments. That’s why your tax rate in Dallas might look different from that in Austin, even for properties of similar value. Regardless, local budget needs, bond elections, and service demands all influence how steep your rate becomes.

Exemptions Can Lower Your Taxable Value

Exemptions play a big role in reducing property tax burdens for every state. Texas homeowners may qualify for exemptions like the homestead, over-65, disabled person, or veteran exemptions. These reduce the taxable portion of your home’s value, lowering your bill. Other states also offer exemptions, but the rules can differ wildly. Some apply fixed dollar amounts, others apply percentages, and many come with income, age, or residency status restrictions. 

Comparable Sales Help Refine Valuation

Comps are used to double-check the fairness of your assessed value. Appraisal districts look at nearby sales and adjust for property differences using clear, quantifiable methods. For instance, if a neighboring home sold for $400,000 and includes a larger lot and a recently renovated kitchen, appraisers subtract those added values to estimate a closer match for your home.

These adjustments are essential during the protest process. Homeowners who believe their property is overvalued can present better comps and highlight inaccuracies. This step is one of the most effective ways to argue for a reduced valuation and, in turn, lower your tax bill.

Why Texas Property Tax Calculations Feel Unique

Texas stands out because our state doesn’t collect personal income tax. That puts more pressure on property taxes to fund public services like schools, infrastructure, and emergency response. As a result, Texas homeowners often pay higher property tax bills even if the rate appears average on paper.

Other states balance the equation differently. For example, Colorado uses a lower assessment ratio, often around 7.15% for residential properties, which means only a small portion of a home’s value is taxed. Paired with caps on annual increases, this difference makes property taxes more predictable for many Coloradans.

Other Factors Influencing Property Tax Rates Across the U.S.

Property tax rates change from one ZIP code to the next for a reason. Local priorities, funding gaps, and state-specific rules influence how much homeowners and commercial property owners pay. These key factors explain why your property tax bill in Texas might look very different from someone’s in another state:

• Local Budget Requirements Shape Tax Rates: Counties and cities rely heavily on property tax revenue to fund services. Tax rates often climb to meet those needs in areas with larger budgets or growing infrastructure demands. Urban centers usually face more pressure than rural communities, frequently leading to higher rates.
• Real Estate Prices Affect the Base, Not Just the Rate:  In regions with higher home values, tax rates may appear lower, but local governments still collect substantial revenue. Tax rates are sometimes raised in lower-value markets to meet the same budget thresholds. That’s why a $150,000 home in one state may carry a higher rate than a $400,000 home elsewhere.
• State and Local Policies Add Complexity: Some states restrict the amount by which property values can increase year over year or the amount of tax that can be collected. Others apply percentage-based or fixed-dollar exemptions for groups like seniors, veterans, or agricultural landowners.
• Ballot Measures Can Push Rates Up or Down: Voter-approved bonds and local referendums often impact tax rates. For example, school districts may request short-term increases to fund new buildings, while counties may adjust rates based on road repair needs. 

States with the Highest Property Tax Rates

The following rankings reflect 2023 data from the Tax Foundation, which tracks average effective property tax rates on owner-occupied homes. These figures represent the percentage of a home’s value paid annually in property taxes and highlight just how much those totals can vary. From long-standing policy decisions to real estate market shifts, these differences can add up fast for homeowners.

Highest Property Tax Rates in the U.S. (Top 25 States)

Rank	State	Effective Tax Rate
1	Illinois	1.84%
2	New Jersey	1.52%
3	Connecticut	1.41%
4	Ohio	1.35%
5	Texas	1.38%
6	Nebraska	1.29%
7	Wisconsin	1.29%
8	Iowa	1.27%
9	Pennsylvania	1.26%
10	Kansas	1.26%
11	New Hampshire	1.24%
12	Vermont	1.22%
13	Michigan	1.08%
14	Massachusetts	0.96%
15	North Dakota	0.96%
16	Alaska	0.94%
17	Rhode Island	0.94%
18	Florida	0.90%
19	Maine	0.89%
20	Oklahoma	0.88%
21	Georgia	0.82%
22	New York	0.82%
23	Indiana	0.84%
24	Oregon	0.84%
25	Maryland	0.85%

States with the Lowest Property Tax Rates

The list below ranks U.S. states with the lowest average effective property tax rates based on 2023 data from the Tax Foundation. These percentages reflect how much the average homeowner pays in annual property taxes as a portion of their home’s value. While low tax rates don’t always mean a low total bill, they can still offer major savings depending on local assessments, exemptions, and real estate values.

States with the Lowest Property Tax Rates in 2023 (Ranked 26–50)

Rank	State	Effective Tax Rate
1	Hawaii	0.33%
2	Idaho	0.41%
3	Arizona	0.41%
4	Alabama	0.41%
5	Delaware	0.43%
6	Utah	0.45%
7	Tennessee	0.46%
8	West Virginia	0.47%
9	Nevada	0.48%
10	Wyoming	0.49%
11	Arkansas	0.60%
12	North Carolina	0.62%
13	New Mexico	0.64%
14	Mississippi	0.64%
15	Montana	0.67%
16	California	0.69%
17	Colorado	0.50%
18	Kentucky	0.77%
19	Louisiana	0.77%
20	Washington	0.78%
21	Virginia	0.81%
22	Georgia	0.82%
23	Florida	0.90%
24	Maine	0.89%
25	Oklahoma	0.88%

Effective Strategies to Manage Your Property Tax Burden

Property taxes represent a significant annual expense for homeowners and commercial property owners, but smart strategies can help bring these costs down. Arm yourself with a proactive approach and gain more control over your property tax bill with these proven methods:

Know How Your Property Is Valued

Most appraisal districts base your property’s value on the recent sale prices of similar homes. However, no two properties are identical. Local appraisers apply mathematical adjustments to reflect differences in size, condition, layout, or features like renovations or pools. For instance, if a nearby home sold for $20,000 more but includes a finished basement or upgraded kitchen, the appraiser may adjust your value down to account for those differences. Reviewing these details gives you better insight into how your valuation was calculated and where it may be off base.

Double-Check Your Assessment Notice

When you receive your annual notice, review the details closely. Look for inaccuracies in square footage, number of bathrooms, or listed amenities. Even small mistakes, such as a miscounted garage or an outdated condition rating, can inflate your assessed value. Likewise, collecting sales records, listing photos, or repair invoices that back up your claim gives you a stronger case for correction.

Take Advantage of Available Exemptions

Texas offers several exemptions that lower the taxable portion of your home’s value. The homestead exemption is one of the most common, but additional reductions exist for seniors, veterans, and people with disabilities. If your household circumstances change—such as reaching age 65 or welcoming a qualifying veteran—make sure to apply for updated exemptions right away.

Protest an Unfair Appraisal

If your home’s assessed value feels out of line with reality, you have the right to protest it. This is one of the most direct ways to lower your property tax bill. Use sales data from comparable homes, document key differences, and highlight condition issues with photos or estimates. The most effective protests use clear math, such as value adjustments between comps, to show why the appraisal should be lowered.

Our team at Texas Tax Protest helps Texans make strong, data-driven cases when they feel their assessment is too high. We pair market insight with one-on-one guidance so you can focus on getting a fair valuation.

Final Thoughts

Property taxes can shape everything from monthly budgets to long-term investment goals. Some states ease the pressure with lower rates, while others, like Texas, place more on local property owners to fund public services; however, where your state ranks is only part of the equation. 

Knowing how to respond when your assessment feels off is the real value. You must tell the whole story behind your property’s value to make real savings. For Texans who feel their tax bill doesn’t match their home or building, our team at Texas Tax Protest is here to help. We break down the process, analyze your comps, and help build a case that pushes for a fair, accurate valuation – one backed by data tailored to your situation.

Read more: 

• When Is the Time to Protest Your Property Taxes in Texas?
• Delinquent Taxes: What Happens If You Don’t Pay on Time?
• Tax Sale: What It Means and How to Prevent Losing Your Property

Frequently Asked Questions About Property Taxes by State

Are property taxes based on market value or assessed value?

Property taxes are typically based on the assessed value of your property, not necessarily the price you’d get if you sold tomorrow. In Texas, county appraisal districts determine this value by analyzing recent sales of comparable properties, then making mathematical adjustments for differences like lot size, home upgrades, or unique features. 

How often are properties reassessed for tax purposes?

In Texas, properties are usually reassessed annually by local appraisal districts. The reassessment helps keep property valuations current, reflecting changes in the real estate market, property upgrades, or new construction. Staying aware of these yearly updates is key, so you don’t pay more than you should.

Can you appeal your property tax assessment?

Yes, you have the right to protest your property tax assessment if you believe it’s too high. Texas Tax Protest walks you through the process, helping gather comparables, adjust for property differences, and advocate for a fair value. Acting quickly matters because protest deadlines come up fast once assessments are mailed.

Are there state programs to help with property taxes?

Most states, including Texas, offer relief programs that can lower your tax burden if you qualify. Standard options include exemptions for homeowners, seniors, disabled veterans, and other special groups. Texas Tax Protest’s team can help you determine if you’re eligible and handle exemption applications to streamline the process.

Is it possible to deduct property taxes on federal income taxes?

Yes, property taxes are usually deductible on your federal income tax return, but annual limits exist. Most homeowners can itemize these deductions when they file their taxes – remember the IRS puts caps on the total amount. It’s a great way to offset the cost, but check the latest IRS rules to see how much you can claim.

What is the difference between property tax and real estate tax?

These terms are often used interchangeably, but there’s a slight distinction: property tax generally refers to taxes on land and structures (your home and the land it sits on). Some states use “real estate tax” especially when talking about taxes on immovable property, but the end result is the same—both fund local services like schools, roads, and emergency services.

Are property tax rates fixed or do they change over time?

Property tax rates can fluctuate from year to year. Local governments decide rates based on budget needs for services like schools, police, and infrastructure. Sometimes, voters also approve changes via ballot measures, so it pays to keep up with local tax rate changes.