Property Taxes, Explained
When you’re house hunting, it’s easy to get fixated on the listing price and the mortgage rate. But there’s a "hidden" cost that can vary wildly depending on which side of a state line you land: property taxes.
Whether you’re looking to settle down in a quiet suburb or a bustling city, understanding how property taxes are calculated—and where they are highest—is essential for your long-term budget. In this post, we’ll break down the basics of how these taxes work and provide a state-by-state comparison to help you plan your next move.
How Property Taxes Are Calculated Property taxes aren't just a random number. They are typically determined by two main factors:
Assessed Value: This is the value a local tax assessor assigns to your home. Note that this is often different from the market value (what you could sell it for).
Millage Rate: Also known as the tax rate, this is the amount per $1,000 of property value used to calculate your bill.
For a deeper dive into how your mortgage and taxes play together, check out this helpful breakdown:
Why Do Rates Vary So Much? Property taxes are the primary engine for local funding. They pay for your local public schools, road repairs, fire departments, and police services. States like New Jersey have high property taxes because they rely heavily on them to fund education. In contrast, states like Hawaii have much lower property tax rates because they use other revenue streams, such as state-level sales and income taxes, to fund their services.
Property Taxes by State: 2024–2025 Averages Below is a look at the average effective property tax rates across the country. As you'll see, the difference between the most and least expensive states can be thousands of dollars per year.
| State | Average Property Value | Average Annual Real Estate Taxes Paid Per Owner-Occupied Home | Average Effective Property Tax Rate per $1,000 of Home Value |
|---|---|---|---|
| Alabama | $283,124.99 | $1,052.00 | 3.72 |
| Alaska | $405,237.86 | $3,646.75 | 9.00 |
| Arizona | $501,951.97 | $2,138.14 | 4.26 |
| Arkansas | $257,978.08 | $1,394.82 | 5.41 |
| California | $991,291.13 | $6,864.92 | 6.93 |
| Colorado | $677,248.95 | $3,516.40 | 5.19 |
| Connecticut | $553,370.61 | $7,498.37 | 13.55 |
| Delaware | $420,509.88 | $2,157.25 | 5.13 |
| District of Columbia | $913,737.38 | $5,771.70 | 6.32 |
| Florida | $514,257.96 | $3,908.69 | 7.60 |
| Georgia | $405,661.98 | $3,111.68 | 7.67 |
| Hawaii | $1,046,221.74 | $3,227.24 | 3.08 |
| Idaho | $523,998.51 | $2,269.42 | 4.33 |
| Illinois | $343,708.48 | $6,163.04 | 17.93 |
| Indiana | $285,706.66 | $2,161.27 | 7.56 |
| Iowa | $270,179.98 | $3,375.56 | 12.49 |
| Kansas | $290,644.22 | $3,491.02 | 12.01 |
| Kentucky | $264,893.56 | $1,916.10 | 7.23 |
| Louisiana | $259,947.37 | $1,448.27 | 5.57 |
| Maine | $409,498.93 | $3,699.79 | 9.03 |
| Maryland | $512,264.83 | $4,619.08 | 9.02 |
| Massachusetts | $722,873.08 | $6,852.73 | 9.48 |
| Michigan | $303,654.02 | $3,427.65 | 11.29 |
| Minnesota | $389,162.73 | $3,841.59 | 9.87 |
| Mississippi | $228,671.43 | $1,237.70 | 5.41 |
| Missouri | $296,792.48 | $2,519.74 | 8.49 |
| Montana | $534,894.94 | $3,166.48 | 5.92 |
| Nebraska | $301,264.88 | $4,155.47 | 13.79 |
| Nevada | $541,365.16 | $2,727.35 | 5.04 |
| New Hampshire | $518,882.65 | $7,003.40 | 13.50 |
| New Jersey | $582,924.99 | $9,766.54 | 16.75 |
| New Mexico | $328,129.46 | $2,000.20 | 6.10 |
| New York | $617,186.70 | $7,572.62 | 12.27 |
| North Carolina | $402,723.15 | $2,512.73 | 6.24 |
| North Dakota | $302,479.55 | $2,846.18 | 9.41 |
| Ohio | $283,660.14 | $3,618.83 | 12.76 |
| Oklahoma | $268,703.09 | $2,094.73 | 7.80 |
| Oregon | $566,121.45 | $4,466.95 | 7.89 |
| Pennsylvania | $338,581.10 | $3,851.24 | 11.37 |
| Rhode Island | $535,120.87 | $5,337.65 | 9.97 |
| South Carolina | $392,912.53 | $1,722.28 | 4.38 |
| South Dakota | $316,841.45 | $3,161.99 | 9.98 |
| Tennessee | $412,337.77 | $1,903.28 | 4.62 |
| Texas | $393,423.84 | $4,896.55 | 12.45 |
| Utah | $630,435.85 | $2,847.96 | 4.52 |
| Vermont | $400,366.52 | $5,600.16 | 13.00 |
| Virginia | $502,111.76 | $3,783.96 | 7.54 |
| Washington | $726,640.53 | $5,356.16 | 7.37 |
| West Virginia | $216,035.77 | $1,044.03 | 4.83 |
| Wisconsin | $339,949.37 | $4,037.28 | 11.88 |
| Wyoming | $472,429.55 | $2,750.01 | 5.82 |
| Puerto Rico | $176,730.88 | $176.69 | 1.00 |
The Bottom Line When you're budgeting for a home, don't just look at the monthly principal and interest. A low-tax state could save you hundreds of dollars a month, giving you significantly more buying power. If you’re considering a move to a high-tax state, make sure to look into available exemptions (like homestead or veteran exemptions) that might help take the sting out of your annual bill.
About Emmett Clark
Emmett Clark is a licensed mortgage professional with 20+ years of experience helping families achieve their homeownership dreams. Licensed in 20 states nationwide, Emmett specializes in finding the right mortgage solution for each client's unique situation.
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