U.S. Property taxes in 2026: Which states pay the most and the least

A recent study from WalletHub, a personal finance website, emphasizes the wide disparities in property taxes across the United States, indicating that homeowners in certain states face rates more times higher than those in lower-taxed areas. According to the U.S. Census Bureau, the average American household pays $3,119 each year in property taxes. WalletHub highlights that these taxes impact not only homeowners but also renters, as they influence local government budgets and indirectly affect rental costs.

“This find was so sudden and amazing, it was really emotional for our team,” WalletHub cited when reviewing the state-by-state analysis.

How Property Taxes Are Calculated

To evaluate state property tax burdens, WalletHub divided every state’s median real estate tax payment by the median home price, generating an effective tax rate. Employing these rates, the study approximated what a homeowner would pay on a median-valued home $332,700 in 2024. This methodology helps compare tax obligations in states regardless of local housing values.

The report confirms that property taxes are not just a challenge for homeowners: even renters indirectly contribute through rent hikes impacted by local taxes.

Top 10 States With the Highest Property Taxes

1. New Jersey – 2.23% effective rate; $9,541 annually
   
2. Illinois – 2.07%; $5,189 per year
   
3. Connecticut – 1.92%; $6,575 annually
   
4. New Hampshire – 1.77%; $6,505 yearly
   
5. Vermont – 1.71%; $5,176 annually
   
6. Maryland – 1.60%; nearly $8,000 yearly
   
7. Texas – 1.58%; $4,790 annually
   
8. Wisconsin – 1.51%; $4,594 yearly
   
9. Nebraska – 1.50%; $3,350 per year
   
10. Iowa – 1.43%; $2,795 annually (can rise to $4,329 on higher-valued homes)
    

Homeowners in these states experience the heaviest tax burdens, often paying thousands more annually than the national average.

Top 10 States With the Lowest Property Taxes

1. Hawaii – 0.27%; $888 annually
   
2. Alabama – 0.38%; $1,185 per year
   
3. Colorado – 0.49%; $2,460 annually
   
4. Nevada – 0.49%; $1,970 per year
   
5. South Carolina – 0.51%; $1,530 yearly
   
6. Arizona – 0.52%; $1,858 per year
   
7. Utah – 0.53%; $2,412 annually
   
8. Idaho – 0.53%; $1,619 per year
   
9. Delaware – 0.53%; $1,731 annually
   
10. West Virginia – 0.54%; $835 per year
    
    

While these states have lower rates, homeowners should consider total housing costs, as some low-tax states have higher median home values.

Why This Matters

Understanding property tax rates is significant for prospective homebuyers, investors, and anyone planning long-term finances. States with high taxes may provide better-funded schools and infrastructure but can be financially burdensome, while low-tax states can attract residents but may depend on other revenue sources to fund local services.

FAQs:

Q1: What are property taxes?
Property taxes are levies imposed by local authorities on real estate and land. They fund schools, roads, and other public services.

Q2: How much do Americans pay on average?
The average household spends almost $3,119 each year on property taxes. Rates vary significantly depending on the state and home value.