For homeowners and potential buyers, property tax plays a key role in determining the overall cost of owning a home. While these taxes fund basic public services, they can also be a huge financial burden. Fortunately, some states provide more favorable property tax rates, thus providing relief to residents. According to the latest data, here are the six states with the lowest effective property tax rates in 2025.
1. Hawaii – 0.27%
Hawaii has the lowest effective property tax rate at just 0.27%. While Hawaii’s home prices are the highest in the U.S., the smallest property tax burden helps reduce the overall financial burden for homeowners. The state uses policies that usually lower than the market value to assess the value, which is also beneficial to residents. For retirees and investors who can afford upfront costs of homes, Hawaii offers an inviting blend of natural beauty and ongoing savings. In addition, with the exemption of homesteads, many residents can further reduce their tax bills.
2. Alabama – 0.38%
Alabama is another state where homeowners enjoy a lot of tax savings. With only 0.38% effective, Alabama is always the most affordable state for homeowners. More importantly, Alabama allows federal income tax deductions on state tax returns, providing additional financial advantages. Lower house prices combined with moderate property taxes make Alabama a young family, retiree, and anyone who wants a lower cost of living without giving up Southern hospitality and charm.
3. Nevada – 0.49%
In Nevada, property taxes are low and have an effective efficiency of 0.49%. The state also does not have a well-known personal income tax, which makes it a double appeal to both homeowners and entrepreneurs. Nevada has implemented a tax cut that limits annual increase in homeowners’ tax bills, thus providing residents with protection from sudden, dramatic increases. Whether you’re attracted by the excitement of Las Vegas or the scenic scenery of Reno and Lake Tahoe, Nevada’s low property tax makes it an economically savvy settlement.
4. Colorado – 0.49%
Colorado’s landscape is stunning, with a booming job market and relatively low property taxes, and thus popularized due to Nevada’s 0.49%. While median housing prices in cities like Denver and Boulder are above the national average, low property tax rates can also help homeowners manage their monthly expenses. Colorado also offers property tax exemptions for seniors and disabled veterans, providing more opportunities for savings. For active retirees and young professionals, Colorado presents a balanced combination of outdoor adventure and economic opportunities.
5. South Carolina – 0.51%
South Carolina has a low property tax rate of 0.51%, and the cost of living is usually combined. South Carolina homeowners benefit from generous exemptions, especially for seniors, veterans and disabled people. In addition to financial allowances, South Carolina offers a rich culture, historic towns and beautiful coastline, all of which make it a particularly popular destination for retirees and transplanters to seek warm weather. South Carolina’s mountains and beaches are within driving distance, making low-cost living feel like a real luxury.
6. Arizona – 0.52%
Arizona puts the list on the list at an effective property tax rate of 0.52%. Known for its warm climate, growing cities and diverse landscapes, Arizona remains a hot spot for retirees and families. Cities such as Phoenix, Tucson and Scottsdale offer a variety of living options at reasonable prices, and the state’s tax laws provide more savings for seniors through property valuation freezes and exemptions. If you are looking for sunshine, amazing nature parks and affordable home ownership, Arizona is a solid bet.
Choose the right place to call home
Although property taxes are only part of the financial challenge, they play an important role in determining the long-term affordability of a home. States such as Hawaii, Alabama and Nevada prove that you can enjoy high quality life without facing high property tax bills. Whether you are planning to retire, relocate, or just invest in a second property, understanding the property tax rate can save you thousands of dollars.
Before taking action, it is important to go beyond the price of the home and consider all the fees involved, including local tax policies. Some research now may lead to huge economic benefits in the future.
Is a low property tax enough to make you consider moving, or other factors such as climate, job opportunities and culture equally important?
Read more:
Is it worth buying a house? What $300,000 can get you in different states
10 Big Cities Still Affordable Costs of Living
Riley is an Arizona native with over nine years of writing experience. From personal finance to travel to digital marketing to popular culture, she wrote everything in the sun. When she is not writing, she will spend time outside, reading or embracing two corgis.
