Smart homebuyers are looking for a state with no property tax to avoid long-term costs. If you're one of them, you're in luck. We've rounded up 10 U.S. states that either don’t charge property taxes or keep them impressively low. Let’s discover!
What Is Property Tax?
Property tax is a recurring fee that homeowners pay to local governments, based on the assessed value of their property. It helps fund essential public services like schools, emergency services, road maintenance, and parks.
Unlike a one-time home purchase expense, property tax is ongoing, usually billed annually or semi-annually, making it a key part of your total cost of homeownership.
Why Is Property Tax Important for Homebuyers and Renters?
For homebuyers, property taxes can significantly impact their monthly housing costs and long-term affordability. A seemingly affordable home can end up costing thousands more each year if it’s in a high-tax area.
Renters aren’t off the hook either. Landlords typically pass property tax costs on to tenants through rent, so high property taxes in a neighborhood can drive rent prices up.
10 U.S. States with No Property Taxes in 2025
Well... almost. These states with the lowest property taxes either don’t charge traditional property tax or keep rates impressively low. Before diving into each state, here’s a quick look at how they stack up when it comes to property tax rates, overall tax friendliness, and homebuyer appeal:
1. Hawaii
Hawaii’s property tax advantage stems from a unique mix of statutory rate caps and generous owner‑occupancy exemptions: counties cannot raise assessed values by more than 5% annually, and each homeowner gets a $100,000 exemption off their taxable base. The trade‑off is a very high cost of living, thanks to island isolation driving up everything from groceries to utilities, plus limited local job markets outside tourism and hospitality.
Pros:
- Lowest property tax rate in the U.S.
- Strong homeowner exemptions & assessment caps
Cons:
- Extremely high home‑purchase and living costs
- Geographic isolation (expensive flights, limited markets)
Best For: High‑earners or retirees who value island living and can absorb non–housing expenses
2. Alabama
Alabama’s low valuations reflect a slower‑growing economy: average household incomes are about 85% of the national median, and major‑metro job hubs are limited to Birmingham, Huntsville and Mobile.
Pros:
- Very low property taxes and overall cost of living
- Mild winters and rich Southern culture
- Affordable housing market for first‑time buyers
Cons:
- Below‑average incomes and uneven job growth
- School quality varies widely by county
Best For: First‑time homebuyers, retirees, and those seeking maximum affordability.
3. Nevada
Homeowners in this state enjoy a significantly lower tax burden compared to most other places in the country. In fact, the average annual property tax bill in 2023 was only $1,889, making Nevada the 17th most affordable state for property taxes.
With Las Vegas and Reno leading the way in job growth and entertainment, there’s plenty to do when you're not saving on taxes. The median home value is around $446,700, and because the property tax rate is so low, your home’s value doesn’t hit your wallet nearly as hard as it would in other states.
Pros:
- No state income tax
- Low property tax rate (0.55%)
- Plenty of sunshine and warm weather year-round
- A growing job market and a vibrant entertainment scene
Cons:
- A desert climate may not be for everyone (hot summers)
- Limited water resources
- Property prices are rising, particularly in popular areas like Las Vegas
Best For: Anyone interested in the entertainment and tech hubs of Nevada.
4. Colorado
Colorado caps residential assessments at 7.15% of market value and limits annual increases. The state’s dynamic economy complements world‑class outdoor recreation opportunities, from alpine skiing to high‑elevation hiking. Rapid growth has, however, intensified housing demand and heightened wildfire and water‑scarcity concerns.
Pros:
- Thriving tech, aerospace and renewable‑energy sectors
- Stable assessment caps protect homeowners
Cons:
- High home prices and rising cost of living
- Traffic congestion around Denver/Boulder
Best For: Active professionals and families who prioritize outdoor access and a strong job market.
5. South Carolina
At an effective rate of 0.51% on a $300,000 median home, often further reduced by generous homestead exemptions, South Carolina offers annual tax bills near $1,200. The state’s coastal Lowcountry and Upstate regions both enjoy steady economic expansion in tourism, manufacturing and logistics.
Pros:
- Homestead exemptions lower taxes further for primary residences
- Warm climate, beaches, and golf communities
Cons:
- Hot, humid summers
- Variable school quality outside major metros
Best For: Retirees, families, and golf/beach enthusiasts seeking low‑tax living.
6. Arizona
Arizona has one of the nation’s most favorable property tax frameworks: modest levies that translate into exceptionally manageable annual bills when applied to median home values. This tax advantage complements a suite of retiree‑oriented exemptions, most notably for Social Security income, making the Grand Canyon State a magnet for those seeking to stretch their retirement dollars.
Pros:
- No tax on Social Security benefits
- Rapidly expanding healthcare, tech and manufacturing sectors
Cons:
- Extreme summer heat and persistent drought
- Widespread urban sprawl and increasing commute times
Best For: Retirees, winter residents and families seeking warm‑weather.
7. Delaware
The average annual property tax bill comes out to just $1,635, making Delaware a great choice for both retirees and cost-conscious families. Moreover, Delaware has no sales tax. That’s a huge win for anyone trying to cut back on everyday expenses or make the most of a fixed income.
Pros:
- No state sales tax
- Affordable home prices compared to the surrounding states
- Convenient access to major metro areas
Cons:
- Smaller job market than neighboring states
- Some rural areas may lack amenities
Best For: Retirees looking for tax relief and families who want affordability.
8. Idaho
Idaho preserves its reputation for affordable living through a property tax structure that keeps effective rates well below the national average, even as demand for housing surges. It offers a mix of small-town charm and modern conveniences.
Pros:
- Great for outdoor activities
- Low taxes, especially for retirees
- New opportunities in tech and business
Cons:
- Rising home prices in popular areas
- Limited services in rural towns
Best For: People who want an active lifestyle close to nature and don’t mind colder winters.
9. Utah
Utah has a low and stable property tax rate, even in fast-growing cities like Salt Lake City. This helps homeowners manage their housing costs over time. The state is booming with tech jobs and startups, especially in the “Silicon Slopes” area.
Pros:
- Strong job growth in tech and business
- Safe and family-friendly communities
Cons:
- Air pollution in the winter
- Socially conservative culture
Best For: Young professionals and families who want both career options and outdoor living.
10. West Virginia
Finally, West Virginia has some of the lowest property taxes and housing costs in the U.S. It’s surrounded by forests, rivers, and mountains, perfect for outdoor lovers. The state is seeing some growth as remote workers look for peaceful, affordable places to live.
Pros:
- Very low taxes and cost of living
- No sales tax on groceries
Cons:
- Fewer high-paying job options
- Some towns lack modern services
Best For: Retirees, remote workers, and nature lovers who want low costs and a quiet lifestyle.
How States Without Property Taxes Make Up for the Loss in Revenue
You might wonder: If some states keep property taxes low, or nearly zero, how do they fund public services like schools, roads, and emergency services?
They shift the tax burden elsewhere.
- Higher sales taxes: For example, states like Nevada and South Dakota rely heavily on sales and excise taxes to balance the books. Every time you dine out, shop, or fuel up, you’re contributing to state revenue.
- Tourism and industry revenue: States like Florida and Nevada capitalize on tourism dollars, using hotel taxes, car rental fees, and entertainment taxes to fund public services.
- Fees, tolls, and special assessments: You might find more toll roads, vehicle registration fees, or local assessments on utilities and services in place of high property taxes.
So while your property tax bill might look delightfully low, it’s important to consider the full tax picture when evaluating a move.
Tips to Find Property with Low Taxes
Here are some smart strategies to keep your costs low over the long haul:
- Look beyond the tax rate: A low tax rate on an expensive home could still mean a high bill. Compare effective tax rates, home values, and average annual property taxes side by side.
- Research local exemptions: Many states offer exemptions for seniors, veterans, disabled homeowners, or primary residences. These can shave thousands off your tax bill annually.
- Consider up-and-coming areas: Some counties and towns offer tax incentives to attract new residents.
- Watch for hidden costs: Special assessments, HOA fees, and local levies can sneak up on you. Always request a full property tax breakdown before you buy.
Bottom Line
While there’s no true state with no property tax, some come impressively close. In 2025, these ten states stand out as some of the smartest places to buy a home if you want to keep taxes low!
Explore more informative blogs and guides like this one on LeaseRunner!
FAQs
Q1. Is there really a state with no property tax at all?
Not exactly. Every U.S. state has some form of property tax, usually collected at the local level to fund schools, infrastructure, and emergency services. However, some states offer such low effective tax rates or generous exemptions (especially for seniors or primary residences) that your bill can feel nearly nonexistent.
Q2. Can I move to a low property tax state just to save money?
Yes! And many people do, but it's important to consider the full tax picture. States with low property taxes might have higher income or sales taxes, or fewer public services.
