The 2025 Property Tax Playbook: How Your State Stacks Up

Property taxes in America can vary significantly from state to state, influenced by differing tax rates and property values. Understanding these variations is crucial for homeowners and investors aiming to manage expenses effectively.

Key Takeaways on State Property Taxes in 2025

1. Assessment Basis: Property taxes are calculated based on the assessed value of a home, which is determined by local tax authorities. The tax amount owed is a product of this assessed value and the state's tax rate.
2. States with the Lowest Property Taxes: Hawaii continues to have the lowest effective property tax rate at 0.27%, followed by Alabama at 0.39%, Colorado at 0.49%, and Nevada at 0.50%.
3. States with the Highest Property Taxes: New Jersey maintains the highest effective property tax rate at 2.23%, with Illinois at 2.08%, Connecticut at 1.79%, and New Hampshire at 1.93%.
4. No States Without Property Taxes: As of 2025, all U.S. states impose property taxes. However, some states offer tax relief programs or credits to assist homeowners.

Understanding Property Taxes

Property taxes are primarily used to fund local services such as public education, infrastructure maintenance, and emergency services. The amount owed by a homeowner is determined by multiplying the assessed value of their property by the local tax rate.

For instance, a home assessed at $300,000 in a state with a 1% tax rate would incur a $3,000 annual property tax.

Factors Influencing Property Taxes

• Assessed Value: Determined by local assessors, this value may not always align with the market value and can be influenced by factors such as property condition, location, and recent sales of comparable properties.
• Local Tax Rates: Set by local governments, these rates can vary within a state and are subject to change based on budgetary needs and voter-approved measures.

Managing Property Taxes

Homeowners can take several steps to manage their property tax obligations:

• Stay Informed: Regularly review property assessments and understand how local tax rates are determined.
• Appeal Assessments: If you believe your property's assessed value is too high, you can appeal to your local tax assessor's office.
• Explore Exemptions: Investigate if you qualify for any state or local tax exemptions, such as those for primary residences, seniors, or veterans.

By staying informed and proactive, homeowners can better navigate the complexities of property taxes and potentially reduce their financial burden.

States Ranked by Property Tax Rates (2025)

Below is a ranking of states from the lowest to the highest effective property tax rates:

1. Hawaii – 0.27%
2. Alabama – 0.39%
3. Colorado – 0.49%
4. Nevada – 0.50%
5. Louisiana – 0.55%
6. South Carolina – 0.56%
7. District of Columbia – 0.57%
8. Delaware – 0.57%
9. West Virginia – 0.58%
10. Wyoming – 0.58%
11. Arkansas – 0.61%
12. Utah – 0.63%
13. New Mexico – 0.65%
14. Mississippi – 0.65%
15. Tennessee – 0.66%
16. Idaho – 0.69%
17. Arizona – 0.72%
18. Missouri – 0.73%
19. Montana – 0.74%
20. Kentucky – 0.78%
21. California – 0.76%
22. Indiana – 0.76%
23. Florida – 0.83%
24. North Carolina – 0.84%
25. Virginia – 0.85%
26. Oregon – 0.90%
27. Washington – 0.93%
28. Georgia – 0.94%
29. Oklahoma – 0.97%
30. Alaska – 1.02%
31. North Dakota – 1.05%
32. Minnesota – 1.08%
33. Pennsylvania – 1.09%
34. Texas – 1.10%
35. Kansas – 1.14%
36. Michigan – 1.31%
37. Nebraska – 1.36%
38. Wisconsin – 1.53%
39. Iowa – 1.57%
40. Rhode Island – 1.63%
41. Massachusetts – 1.63%
42. Ohio – 1.56%
43. Vermont – 1.76%
44. Connecticut – 1.79%
45. New Hampshire – 1.93%
46. Illinois – 2.08%
47. New Jersey – 2.23%

By understanding where each state ranks, homeowners can better assess how property taxes impact their financial planning and make informed decisions about where to live or invest.

*Belong is not a financial services or advisory company. The information provided is for informational purposes only and should not be construed as financial or tax advice. For specific questions or guidance regarding your financial or tax situation, we strongly recommend consulting with a qualified tax expert or financial advisor.