Property Tax Rates by State: The Complete 2026 Guide
Most homebuyers focus on mortgage rate. They should pay equal attention to property tax — because in high-tax states, property tax can add $800–$1,500/month to your housing cost on a median-priced home.
Here's the complete picture.
Highest Property Tax States
| State | Effective Rate | Monthly Tax on $400K Home |
|---|---|---|
| New Jersey | 2.23% | $743 |
| Illinois | 2.09% | $697 |
| Connecticut | 1.79% | $597 |
| New Hampshire | 1.86% | $620 |
| Wisconsin | 1.61% | $537 |
| Nebraska | 1.73% | $577 |
| Texas | 1.87–1.96% | $623–$653 |
| Ohio | 1.52% | $507 |
New Jersey is consistently the most expensive for property taxes in the US. A $600,000 home in Bergen County can generate $15,000+ in annual property taxes — $1,250/month — on top of your mortgage.
Texas surprises people. The state has no income tax, which is great. But it has the highest property tax rates of any major Sun Belt state, compensating for the lack of income tax.
Most Tax-Friendly States for Homeowners
| State | Effective Rate | Monthly Tax on $400K Home |
|---|---|---|
| Hawaii | 0.31% | $103 |
| Alabama | 0.41% | $137 |
| Louisiana | 0.56% | $187 |
| Wyoming | 0.57% | $190 |
| Colorado | 0.57% | $190 |
| South Carolina | 0.57% | $190 |
| Delaware | 0.57% | $190 |
| Nevada | 0.60% | $200 |
| Arizona | 0.62% | $207 |
Hawaii has the lowest property tax rate in the country at 0.31%. But Hawaii also has the highest home prices — so the dollar amount paid is still significant.
Colorado and Arizona stand out as Sun Belt states with genuinely low property taxes. A $500,000 home in Denver pays just $238/month in property taxes. The same-priced home in Chicago pays $875/month.
The Texas Paradox
Texas is worth examining closely because the "no income tax" narrative attracts buyers who don't run the full math.
A teacher earning $65,000/year in Texas saves roughly $4,000/year in state income tax vs California. But on a $350,000 home in Houston, they pay $6,825/year in property taxes. A similar home in California would cost $2,555/year in property taxes.
Net Texas "advantage" on taxes for this buyer: roughly -$2,825/year. The property tax more than wipes out the income tax savings for middle-income earners in mid-range homes.
This math changes significantly for high earners. A $200,000 earner in Texas saves $13,000+ in income tax — which easily exceeds the property tax premium.
The lesson: run your personal numbers, don't rely on state tax narratives.
How Property Tax Affects Your Home Buying Decision
Property tax directly impacts:
- Monthly budget: Higher taxes = less you can spend on mortgage principal
- Break-even point: Higher taxes lengthen the time before buying beats renting
- Total cost of ownership: A 30-year difference between 0.5% and 2.0% tax on a $400K home = $180,000 in additional taxes paid
When our calculator shows you monthly ownership costs, property tax is always included — because it's a real cost that most quick calculators ignore.
The Strategy
If you're flexible about where you live, tax geography is a real variable worth optimizing.
Buying in Colorado vs Illinois saves ~$347/month on a $400K home ($4,164/year). Over 30 years: $124,920 in additional taxes paid in Illinois vs Colorado, not accounting for home value growth.
State property tax rates aren't the only factor — but for long-term owners, they're a significant one.