Property Taxes by State & County: Lowest Property Taxes in the US Mapped

 When it comes to investment and/or rental properties, the taxes you must pay play a very real element in the annual profits you can expect.  Consider the difference between the meager 0.29% levy on real estate in Hawaii compared to the whopping 2.47% owed in New Jersey and it’s easy to see how it affects your income.

The following ranks the current levels of property taxes from the highest to the lowest as of 2023.

From the Highest to Lowest: State Property Taxes 2023

Highest to lowest state property taxes in numbers

Why the property tax percentage matters

Highest to lowest state property taxes in numbers

With a huge difference between the highest and lowest state property taxes, the location of any investment property can make a significant difference to your annual profits. 

From NJ to Hawaii, this is what you’ll currently be paying on any property portfolio in every US state:

• New Jersey – 2.47%
• Illinois – 2.23%
• Connecticut - 2.15%
• New Hampshire – 2.09%
• Vermont 1.90%
• Texas – 1.74%
• Wisconsin – 1.73%
• New York – 1.73%
• Nebraska – 1.67%
• Iowa – 1.57%
• Rhode Island – 1.53%
• Pennsylvania – 1.53%
• Ohio – 1.53%
• Michigan – 1.48%
• Kansas – 1.43%
• Maine – 1.28%
• South Dakota – 1.24%
• Alaska – 1.22%
• Massachusetts – 1.20%
• Minnesota – 1.11%
• Maryland – 1.07%
• North Dakota – 1.00%
• Missouri – 0.98%
• Washington – 0.94%
• Oregon – 0.93%
• Georgia – 0.90%
• Oklahoma – 0.90%
• Florida – 0.86%
• Kentucky – 0.85%
• Indiana – 0.83%
• Montana – 0.83%
• Virginia – 0.82%
• North Carolina – 0.80%
• New Mexico – 0.80%
• Mississippi – 0.79%
• California – 0.75%
• Tennessee – 0.66%
• Idaho – 0.63%
• Arizona – 0.62%
• Arkansas – 0.62%
• Wyoming – 0.61%
• West Virginia – 0.59%
• Utah – 0.58%
• Delaware – 0.58%
• District of Columbia – 0.57%
• South Carolina – 0.56%
• Louisiana – 0.56%
• Nevada – 0.55%
• Colorado – 0.51%
• Alabama – 0.41%
• Hawaii – 0.29%

Why the property tax percentage matters

While property tax—even at the top rate of 2.47% in New Jersey—might seem to be small fry in relation to all the other expenses of a rental property, it still has high significance.

If we look at a home with a value of $244,900, for example, the difference that you’d pay in a year between a house in Hawaii to one in New Jersey would be a massive $5,357. That makes a huge dent in the yearly income and needs to be factored into the monthly rent that you collect from your tenants. It also must be considered when working out the debt service recovery ratio. The better this is, the more likely it is you’ll be approved for any finance and the favorability of the interest rate you’ll pay.

You also need to account for the monetary value. When searching for potential investment properties, a wise purchaser looks at the median price of real estate in the state to assist with working out the viability of a purchase. While this won’t come as any surprise to seasoned investors, those new to the game must understand how this will impact their return. Along with property taxes, other incidentals that might need to be considered for any income equation include:

• HOA fees
• Cleaning and landscaping costs
• Legal fees
• Accounting fees
• Legal fees
• Advertising costs
• Agent fees
• Income tax
• Any personal or vacation use

As you can see, the property tax can be a significant outgoing and something likely to affect the price that you’re willing to pay for an investment property.

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