Looking to settle down or invest in real estate in the U.S. without burning a hole in your wallet on annual taxes? Property tax might not be the flashiest topic, but it can make or break your long-term financial plans. With the right location, you could save thousands each year. In this guide, we’ll walk through the best states to buy property with low property taxes in 2025 — and why they deserve your attention.
What Is Property Tax?
Property tax is a yearly fee that homeowners pay based on the value of their home or land. Local governments use it to fund schools, police, roads, and other public services.
The amount you pay depends on two things: the assessed value of your property and your local tax rate. For example, if your home is worth $250,000 and your area charges 1%, you’ll pay $2,500 a year.
Since tax rates vary by state and even county, choosing a place with the best property tax can save you thousands over time.
Why the Best Property Tax States Matter
Property taxes are one of the most significant recurring costs of homeownership. While mortgage rates fluctuate, your property tax bill will hit you every year — and it varies wildly from state to state. For example, according to the Tax Foundation, the average property tax in New Jersey is over 2%, while in states like Hawaii, it’s well under 0.5%.
If you’re a first-time buyer, retiree, or real estate investor, understanding where to find the best property tax rates in the country can help you plan smarter and stretch your dollars further.
Top States That Offer the Best Property Tax Rates in 2025
So, where can you buy property in 2025 without getting crushed by high annual tax bills? Let’s explore seven states that offer the most homeowner-friendly tax environments this year.
Hawaii: Lowest Property Tax in America
With an effective tax rate of around 0.29%, Hawaii offers the lowest property tax in the U.S. While home prices are steep, your annual tax bill remains manageable. According to SmartAsset, many homeowners also benefit from exemptions.
Alabama: The Best Property Tax State for Retirees
Alabama offers an effective rate of 0.41% and generous exemptions for seniors, veterans, and disabled residents. The Alabama Department of Revenue provides detailed guidelines that make this state particularly appealing for long-term living.
Colorado: Fast Growth with Friendly Taxes
Colorado’s 0.48% rate and local homeowner benefits make it a hot destination for buyers. Cities like Colorado Springs offer strong home values and relatively low taxes, particularly for primary residences (Colorado DOLA).
Nevada: Best Property Tax for No-Income-Tax States
Nevada’s average rate is about 0.50%, and there’s no state income tax. This makes Nevada highly attractive for both investors and remote workers. Clark County’s official site allows you to check exact local rates.
South Carolina: Low Tax Coastal Living
With a tax rate of around 0.53%, South Carolina offers low property tax, especially for owner-occupied homes, which are taxed at a more favourable assessment ratio. More info is available via the South Carolina DOR.
Delaware: Quiet and Tax-Efficient
Delaware offers one of the best property tax deals around — with an average rate of 0.56% and no sales tax. The Delaware Division of Finance highlights how this low cost of living attracts retirees and young professionals alike.
Wyoming: Tax-Friendly and Wide Open
At 0.58%, Wyoming rounds out our list with low taxes and no state income tax. According to the Wyoming Department of Revenue, the state also offers specific tax breaks for rural properties and land investments.
How to Compare and Choose the Best Property Tax Rates
Even in states with low averages, rates can differ by county or city. That’s why it’s important to:
- Use calculators like SmartAsset
- Check local mill rates from your county assessor (e.g., Travis County)
- Understand available exemptions — such as homestead, veteran, or senior discounts
- Watch how often properties are reassessed in each state
The best property tax environment is one that aligns with your home value, location, and life circumstances.
Who Benefits Most from the Best Property Tax States?
Low property taxes are ideal for retirees looking to protect their income, investors hoping to improve rental yield, and families trying to stay within budget. AARP even recommends prioritising tax-favourable states for retirement planning.
Still, property taxes are only part of the puzzle. Factors such as healthcare, education, employment, and infrastructure should also influence where you choose to buy property.
Final Thoughts
There’s no one-size-fits-all answer, but if you want to minimise your yearly homeownership costs, start by comparing states with the best property tax rates. Whether you prioritises low income tax, generous exemptions, or a strong real estate market, 2025 offers plenty of options for savvy buyers.
