Property taxes in the U.S. are levied by local governments and are used to fund various public services like schools, libraries, roads, and parks.
However, this property tax is not a fixed amount of money and depends on two factors for property/homeowners in the U.S.:
- The assessed value of your property
- The property tax rate of your county (basically your area)
These two factors may differ every year as does the property tax for homeowners and real-estate investors. Unfortunately, property owners have little to no control over the property tax they may have to pay, and the possibility of having their property unfairly assessed creeps in. It is one of the crucial reasons why we at Bezit advocate for always protesting your property tax if the bill doesn't seem right to you.
Being in the business of helping the people of Texas, we have learned that there are states in the U.S. that either have no property tax or have very low property taxes. In this article, we'll learn a bit more about them!
The U.S. state with the lowest property tax
When it comes to boasting the lowest property tax, Hawaii has been taking that honor for quite some time, with a tax rate that ranges from 0.25% to 0.56% of a property's assessed value. This means that even if we consider the highest range (0.56%), a person with a property worth $100,000 has to pay a property tax of only $560, which is absolutely mind-blowing compared to what homeowners in other parts of the U.S. pay.
Setting a low property tax rate is not a recent trend in Hawaii; the state's tax structure has always been designed to be property-owner friendly. Some reasons for this could be the state's reliance on significant tourism revenue, the low cost of living, and a relatively small population.
While Hawaii takes the crown for the lowest property tax bracket, there are other states in the U.S. that also offer low property tax rates for their residents.
Top U.S. states with the lowest property tax rates
WalletHub, a prominent personal finance company in the U.S., studied about 50 states to analyze and gain insights on ones that were paying the highest property tax and which were paying the lowest.
Here are some states that paid less than 1% property tax:
- Alabama - 0.41%
- Colorado - 0.51%
- Nevada - 0.55%
- Louisiana - 0.56%
- South Carolina - 0.56%
- District of Columbia - 0.57%
- Delaware - 0.58%
- Utah - 0.58%
- West Virginia - 0.59%
- Wyoming - 0.61%
- Arkansas - 0.62%
- Arizona - 0.62%
- Idaho - 0.63%
- Tennessee - 0.66%
- California - 0.75%
- Mississippi - 0.79%
- New Mexico - 0.80%
- North Carolina - 0.80%
- Virginia - 0.82%
- Montana - 0.83%
While the above states enjoy low property tax rates, there are also some states with higher rates that allow significant exemptions or low property tax rates for senior citizens and disabled veterans.
The U.S. states with the lowest property tax rates or 100% exemptions for seniors and disabled veterans
Here are some of these exemption states, as per the reports shared by the U.S. Department of Veteran Affairs and Veteran United Home Loans.
- Alabama
This is one of the few states that offers a full exemption for seniors, retired people over 65, and people with a 100% disability rating.
- Alaska
In Alaska, veterans over 65 or with a disability rating of 50% or more are eligible for tax exemption for the first $150,000 of their property's value, and the exemption can be transferred to their spouse if the veteran passes away and the spouse is at least 60 years old. Apart from this, Alaska also offers some financial aid to its residents, which help lower the financial burden of any additional taxes that they have to pay
- Florida
While resident veterans with 100% disability ratings may receive a full exemption for their property tax bill, those with a minimum 10% disability rating are still eligible for a $5,000 deduction.
- Georgia
Veteran residents over the age of 65 belonging to low-income housing can receive property tax exemptions. Those with a 100% disability rating may receive a property tax exemption of up to $50,000.
- Mississippi
The first $75,000 of a house's property value is exempted from property tax for people over the age of 65. Additionally, an honorably discharged person with a service-connected total disability is eligible for all property taxes on the assessed value of their homestead property. Unmarried spouses of eligible veterans may also qualify for this exemption.
- South Dakota
South Dakota has some interesting property tax relief policies compared with other states. Low-income households are able to reduce or freeze their property taxes. Apart from this, permanently disabled veterans may be eligible for an exemption on their property up to $150,00, and paraplegic veterans can avail a full property tax exemption.
While we all love our home states, there are times when we have to make tough decisions and explore options for new places that may relieve our financial burdens. One case to consider such options is when we need a lower and affordable property tax bill.
While switching states is one feasible option, another way to reduce your tax burden is by protesting your property tax bill in the right way and proving your claim that your house's value is lower than what the property tax bill says.
That's exactly what we help people do at Bezit, where 500+ homeowners have already been able to successfully protest their high property tax bill and pay only their fair share.
The tax season is fast approaching, and no one wants to deal with last-minute chaos, so if you're ready to reduce your property tax bill this year, join your fellow Texans and pay fair with Bezit.