With the rise of remote work possibilities, many Americans may be looking for new homes in their current state or looking to move to a new one.
Whether you’re paying for a home as part of a homeowner's mortgage statement, financing your home through savings or looking for an investment property, there are a few factors to consider.
Property taxes, how tax-friendly each state is for residents and homeowners insurance are important items to assess when calculating your mortgage payment.
MoneyGeek analyzed the real estate tax rate, annual taxes on a $194,000 house, the state median home value and the annual taxes on homes priced at that state median value for all 50 states and the District of Columbia.
States are ranked based on their effective real estate tax rate. Here are the top 25 states with the most favorable property taxes.
25. Oklahoma
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- Effective Real-Estate Tax Rate: 0.90%
- Annual Taxes on a $194,000 Home: $1,746
- State Median Home Value: $147,000
- Annual Taxes on Home Priced at State Median Value: $1,323
Oklahoma's median home value puts it at 48 out of 51 in the country, up three spots from 2019. Its middle-of-the-road property tax rate also makes it a fairly attractive place to live. Right in the center of the country, you’d most likely be able to fly in any direction and still make it to a business meeting.
24. Florida
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- Effective Real-Estate Tax Rate: 0.89%
- Annual Taxes on a $194,000 Home: $1,727
- State Median Home Value: $245,100
- Annual Taxes on Home Priced at State Median Value: $2,181
Not only is the real-estate tax rate more affordable, but Florida is also a great place to escape a harsh winter. There are several big cities — Orlando, Tampa, St. Petersburg, Jacksonville and Miami — as well as a number of "retiree-friendly" communities, so it can be an attractive place regardless of whether you're looking to slow down or become part of a thriving metropolis.
23. Kentucky
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- Effective Real-Estate Tax Rate: 0.86%
- Annual Taxes on a $194,000 Home: $1,668
- State Median Home Value: $151,700
- Annual Taxes on Home Priced at State Median Value: $1,305
If your home is around the state median value in Kentucky, you're only looking at a little over $100 per month in property taxes. With a real estate tax at .86%, the state is an attractive option for those fleeing higher-priced spots.
22. Indiana
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- Effective Real-Estate Tax Rate: 0.85%
- Annual Taxes on a $194,000 Home: $1,649
- State Median Home Value: $156,600
- Annual Taxes on Home Priced at State Median Value: $1,326
Indiana ranks 45th in the country for median home value and 22nd for property tax rate, making it an attractive option for people trying to reduce their cost of living. Another perk? Its wide-open spaces offer great terrain to raise a family.
21. North Carolina
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- Effective Real-Estate Tax Rate: 0.84%
- Annual Taxes on a $194,000 Home: $1,630
- State Median Home Value: $193,200
- Annual Taxes on Home Priced at State Median Value: $1,623
North Carolina is a great place to live and work, and its reasonably low property tax rate and median home value certainly help. It's tied for #20 for property taxes, and its median home value is well below $200,000, so your annual taxes will be fairly manageable. If you work in the technology or health research field, the Research Triangle can also be a lovely option.
20. Montana
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- Effective Real-Estate Tax Rate: 0.84%
- Annual Taxes on a $194,000 Home: $1,630
- State Median Home Value: $253,600
- Annual Taxes on Home Priced at State Median Value: $2,130
With some of the most beautiful scenery in the country, Montana might be your spot. The state also has a slower pace of life and a relatively affordable median home value, so it should come as no surprise that many people are moving here to get away from it all.
19. Virginia
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- Effective Real-Estate Tax Rate: 0.82%
- Annual Taxes on a $194,000 Home: $1,591
- State Median Home Value: $288,800
- Annual Taxes on Home Priced at State Median Value: $2,368
Virginia's proximity to Washington D.C., plus its extensive shoreline, puts the state’s real estate in the top third of the country's median value list. It comes in at #14 for the state median home value and #19 on the property tax list. It's a favorite of many D.C. professionals who can't afford the median home value in the city.
18. Mississippi
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- Effective Real-Estate Tax Rate: 0.81%
- Annual Taxes on a $194,000 Home: $1,571
- State Median Home Value: $128,200
- Annual Taxes on Home Priced at State Median Value: $1,038
Mississippi is one of the most affordable states to live in when it comes to property values and taxes, so it's an ideal place if you're trying to stay within a housing budget. It's got a low cost of living and a lower cost for higher education.
17. New Mexico
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- Effective Real-Estate Tax Rate: 0.80%
- Annual Taxes on a $194,000 Home: $1,552
- State Median Home Value: $180,900
- Annual Taxes on Home Priced at State Median Value: $1,447
New Mexico is #36 on our median home value list and #17 on the property tax rate list, which means it's an excellent place to consider if you're stretching your housing dollars. The state is currently experiencing slow population growth, giving more opportunities for those leaving the high-priced coasts.
16. California
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- Effective Real-Estate Tax Rate: 0.76%
- Annual Taxes on a $194,000 Home: $1,474
- State Median Home Value: $568,500
- Annual Taxes on Home Priced at State Median Value: $4,321
California has a relatively low property tax rate, ranking in the lowest third in the country. But its high median property value puts it at the highest annual tax dollar amount on our list. If you can find some lower home prices — usually outside bigger cities — you can still take advantage of the fairly low tax rate.
15. Tennessee
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- Effective Real-Estate Tax Rate: 0.71%
- Annual Taxes on a $194,000 Home: $1,377
- State Median Home Value: $191,900
- Annual Taxes on Home Priced at State Median Value: $1,362
Tennessee is home to some of the biggest healthcare corporations in the country. Smaller cities and towns also have more affordable housing, meaning you can take better advantage of lower rates.
14. Idaho
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- Effective Real-Estate Tax Rate: 0.69%
- Annual Taxes on a $194,000 Home: $1,339
- State Median Home Value: $255,200
- Annual Taxes on Home Priced at State Median Value: $1,761
Bordering Montana to the west, Idaho is also close enough to Seattle and Portland to be a feasible option for remote workers from bigger cities. Low property taxes and 20th-in-the-nation home values make this a particularly good alternative to tech-centric states.
13. Arizona
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- Effective Real-Estate Tax Rate: 0.66%
- Annual Taxes on a $194,000 Home: $1,280
- State Median Home Value: $255,900
- Annual Taxes on Home Priced at State Median Value: $1,689
Given the median home value and the real-estate tax rate, you're looking at just $150 per month in property taxes in Arizona. That's not too shabby! The warm weather also makes this state a very popular destination for people looking for a change of temperature and scenery.
12. Utah
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- Effective Real-Estate Tax Rate: 0.63%
- Annual Taxes on a $194,000 Home: $1,222
- State Median Home Value: $330,300
- Annual Taxes on Home Priced at State Median Value: $2,081
Thanks to growing cities like Salt Lake City and Provo, Utah has one of the highest home values in the country, clocking in at #11. But its property tax rates pull it to #10 on our list. If you love skiing and winter sports and are searching for a state close to the West Coast, it is worth considering.
11. Arkansas
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- Effective Real-Estate Tax Rate: 0.62%
- Annual Taxes on a $194,000 Home: $1,203
- State Median Home Value: $136,200
- Annual Taxes on Home Priced at State Median Value: $844
Arkansas currently ranks 49th out of 51 on the median home value list and comes in at 11th overall. With its property tax rates, it is a solid living choice for people who want to stretch their budgets. Plus, it offers beautiful countryside with plenty to do for those who love the outdoors.
10. Wyoming
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- Effective Real-Estate Tax Rate: 0.61%
- Annual Taxes on a $194,000 Home: $1,183
- State Median Home Value: $235,200
- Annual Taxes on Home Priced at State Median Value: $1,435
Your home on the range is #24 on our median home value list, but it has one of the best property tax rates at only .61%. Wyoming's geography is wide open, so it's also possible to spread out, find a bigger space and get some work done.
9. Nevada
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- Effective Real-Estate Tax Rate: 0.60%
- Annual Taxes on a $194,000 Home: $1,164
- State Median Home Value: $317,800
- Annual Taxes on Home Priced at State Median Value: $1,907
Nevada clocks in at #9 on the most favorable property taxes list and 27th for median home value. That means you're looking at paying a smidge over $100 per month in property taxes. People who want warm weather, but don't want the explosive growth of cities like Phoenix, might want to give Nevada a second look.
8. West Virginia
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- Effective Real-Estate Tax Rate: 0.58%
- Annual Taxes on a $194,000 Home: $1,125
- State Median Home Value: $124,600
- Annual Taxes on Home Priced at State Median Value: $723
With the lowest median property value in the country and one of the lowest property tax rates, you're looking at some of the best taxes in the country. There's only one other state on our list where you'll pay less in property taxes on the state's median home value: Alabama.
7. South Carolina
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- Effective Real-Estate Tax Rate: 0.57%
- Annual Taxes on a $194,000 Home: $1,106
- State Median Home Value: $179,800
- Annual Taxes on Home Priced at State Median Value: $1,025
South Carolina's median home values clock in at #37, and property tax rates put it at #6, which means you're looking at roughly $85 per month in property taxes. If you're a fan of college football, you'll have plenty of reasons to celebrate living here.
6. Delaware
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- Effective Real-Estate Tax Rate: 0.57%
- Annual Taxes on a $194,000 Home: $1,106
- State Median Home Value: $261,700
- Annual Taxes on Home Priced at State Median Value: $1,492
Delaware falls in the top half of median home values but the lowest 20% of property tax rates. Bordered by Pennsylvania, New Jersey and Maryland, it’s a great place for people who want to get distance from the big cities but still be close enough to travel to be there within a few hours.
5. District of Columbia
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- Effective Real-Estate Tax Rate: 0.56%
- Annual Taxes on a $194,000 Home: $1,086
- State Median Home Value: $646,500
- Annual Taxes on Home Priced at State Median Value: $3,620
It's a good thing property taxes are so low in Washington D.C. because home values skyrocketed in 2020. It ranks second after Hawaii for median home values that have cracked half a million dollars. But remember that D.C. has no senators and its representative in the House of Representatives has limited voting privileges.
4. Louisiana
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- Effective Real-Estate Tax Rate: 0.55%
- Annual Taxes on a $194,000 Home: $1,067
- State Median Home Value: $172,100
- Annual Taxes on Home Priced at State Median Value: $947
As one of the states with the lowest property tax rates and one of the lowest median home values (#40), Louisiana has some of the lowest annual taxes on homeowners in the country. It's one of only five states where the annual taxes on state median value homes did not crack the four-figure mark.
3. Colorado
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- Effective Real-Estate Tax Rate: 0.51%
- Annual Taxes on a $194,000 Home: $989
- State Median Home Value: $394,600
- Annual Taxes on Home Priced at State Median Value: $2,012
Colorado is one of the best places to be in the country if you're looking for beautiful scenery and gorgeous mountain views. With one of the ten best property tax rates, it’s all the more attractive if you’re looking for a home.
2. Alabama
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- Effective Real-Estate Tax Rate: 0.41%
- Annual Taxes on a $194,000 Home: $795
- State Median Home Value: $154,000
- Annual Taxes on Home Priced at State Median Value: $631
If you're trying to figure out the most tax-friendly states, Alabama will certainly make the list. The state is 47th in a ranking of country-wide home values, and it ranks 2nd for the lowest property tax rate. When you compare it to West Virginia's taxes on median home value, Alabama ekes out a win by $91.
1. Hawaii
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- Effective Real-Estate Tax Rate: 0.28%
- Annual Taxes on a $194,000 Home: $543
- State Median Home Value: $669,200
- Annual Taxes on Home Priced at State Median Value: $1,874
It's a good thing Hawaii has the lowest property tax rates in the country because it's got the highest median property values. You'll easily pay more in annual taxes than in other states for a property at the median state value. But if you can find a home for less, you'll save the most on your total property taxes. Plus, you'll have sunrises and sunsets that everyone else can only dream of.
About the Author
Erik Deckers is a professional writer. He is the author of Mackinac Island Nation and the co-author of four social media marketing books. He has blogged since 1997 and worked as a newspaper humor columnist since 1994.
Sources
- Miller, Corbin L. “The Effect of Education Spending on Student Achievement: Evidence from Property Values and School Finance Rules.” Accessed May 23, 2021
- National Bureau of Economic Research. “School Spending Raises Property Values.” Accessed May 23, 2021
- Tax Foundation. “How High Are Property Taxes in Your State?” Accessed May 23, 2021
- Tax Policy Center. “The State of State (and Local) Tax Policy.” Accessed May 23, 2021