Property taxes can fluctuate from one state to the next, so it helps to know what to expect when buying a home in a new state. You might be interested in states with the lowest property taxes to optimize your financial obligations as you plan to move to the states. Property owners are required to pay property taxes, but the amount will vary depending on the location and requirements set by the local government. Some states have more attractive property tax rates to interest a variety of groups looking to move or relocate, including families, single people, and retirees. Here’s what you need to know about the states with the lowest property taxes in 2022 and how that might impact your decision on where to buy real estate in the US.
Top 5 States with the Lowest Property Taxes
Every state in the US has a minimum property tax and depends on these taxes to fund local projects and plans to support schools, city parks, government services, and more. These are the top 5 states in the US with the lowest property taxes:
Hawaii
Aloha, Hawaii! This beautiful state features the lowest effective property tax rate in the US, at 0.30 percent. However, it is worth noting that Hawaii also has higher home values than other states on this list. When you consider property taxes, you also want to consider the cost of living, which is higher in the state of Hawaii than in other states in the country.
Alabama
Alabama features the second lowest property taxes in the United States. Enjoy southern hospitality and beautiful beaches along the gulf coast when you buy a home in Alabama. This state also has lower home prices than the US average, which allows you to get more bang for your buck! Alabama also features a lower cost of living than many other states around the US. That makes Alabama one of the most affordable states to move to in the whole country!
Louisiana
Just west of Alabama lies Louisiana, known for its annual Mardi Gras celebrations and the birthplace of American blues. Property taxes in Louisiana are also below the national average, along with typical home values in the state. The cost of living in Louisiana is also lower than the national average, which means you can get a great home with low property taxes that won’t put too much strain on your annual household income.
Wyoming
While homes in Wyoming might cost more than their southern counterparts in Alabama or Louisiana, you can still enjoy a low property tax rate at .51 percent and a moderate cost of living. The median household income in Wyoming is just below the national average. Explore the great outdoors and seven national parks, including Yellowstone, when you buy a home in Wyoming. The state of Wyoming also features no state income tax, which makes it a very affordable place to live.
Colorado
Outdoor enthusiasts and adventurers will also appreciate the low property taxes in Colorado. This scenic state features magnificent mountains, rivers, and plains and is a popular place to visit for skiers of all skill levels. While home prices are higher than the national average in Colorado, the median household also exceeds the national average, which can help make living in the Rockies more affordable.
How Property Taxes Benefit Your Community
Whether you are looking at homes for sale in Gulf Shores or exploring the New Orleans real estate market, it helps to get a better understanding of how the state property taxes you pay will benefit your community. The tax rate varies from state to state, but much of your property tax dollars go to supporting your local public services. Consider these five ways property taxes are used to make your community a great place to live.
Public Schools
States use property taxes to build and improve public schools. Finding the right school district for your family is such an important aspect of the home-buying process. Revenue from property taxes can fund everything from paying teacher salaries to effectively maintaining K-12 schools in your area.
City Parks & Green Spaces
Public parks at both the city and state levels receive funding and support from property taxes. Green spaces in the area, including your local ball field or nature preserve, may also get funding to help construct and maintain these popular sites for locals and tourists alike.
Museums, Libraries, & Public Amenities
Property taxes also contribute to funding social services like libraries and public amenities like museums. Local public libraries benefit a wide range of community members and provide many social services. Communities with a museum or local library nearby also benefit from increased property values thanks to these social services in the area.
Road Construction & Repair
Whether you live in the city center or a rural suburb, your property taxes also support road construction and repairs needed to keep your roadways safe. Property taxes help support the construction and maintenance of roads in your area.
Government Services & Administration
Many public safety officers receive funding from the local government in part thanks to your property taxes. This can include the salaries and supplies for firefighters, EMTs, and police in your area. Law enforcement and fire protection are important points of interest for buyers looking for a new place to call home.
Property Taxes Across the Country
The property tax amount for your home will depend on your state and county. The average property tax rate for your state and area will help you know what to expect before buying a home. Property taxes can also vary depending on the average home value in the area, the strength of local businesses, and even the tourism industry in the area. If you are looking to maximize your budget and still own a large piece of land with a big home, then you may want to consider settling down in a state with a lower property tax rate. In general, property taxes help benefit the public good and support your community. Wether you’re planning to relocate to Yuma, AZ or Durham, NC, it’s important to learn how to maximize your home’s value when you take into consideration the state property tax and cost of living in the area.
