🇺🇸 US Property Tax Guide 2026
Property tax rates by state, how assessed values are calculated, homestead exemptions, and a step-by-step guide to appealing your assessment.
Factor property tax into your US affordability calculation:
Affordability Calculator →How Property Tax Works in the US
Unlike the UK's council tax (a flat annual charge), US property tax is calculated as a percentage of your property's value, reassessed periodically. The formula:
Annual Property Tax = Assessed Value × Effective Tax Rate
- Assessed value: Set by the county assessor — often 80–100% of market value (varies by state)
- Mill rate / tax rate: Set by local government; expressed as % or mills (per $1,000 of value)
- Exemptions: Homestead, senior, veteran, and disability exemptions reduce taxable value
- Frequency: Typically paid twice yearly; may be escrowed monthly through your mortgage lender
Property Tax Rates by State — Highest to Lowest (2026)
| State | Effective Rate | Annual Tax on $400k Home |
|---|---|---|
| 🔴 New Jersey | 2.23% | ~$8,920/yr |
| 🔴 Illinois | 2.08% | ~$8,320/yr |
| 🔴 Connecticut | 1.92% | ~$7,680/yr |
| 🔴 New Hampshire | 1.77% | ~$7,080/yr |
| 🔴 Vermont | 1.83% | ~$7,320/yr |
| 🟡 Texas | 1.60% | ~$6,400/yr |
| 🟡 Michigan | 1.54% | ~$6,160/yr |
| 🟡 Ohio | 1.41% | ~$5,640/yr |
| 🟡 Pennsylvania | 1.36% | ~$5,440/yr |
| 🟡 Florida | 0.83% | ~$3,320/yr |
| 🟡 New York | 1.40% | ~$5,600/yr |
| 🟡 California | 0.75% | ~$3,000/yr |
| 🟡 Arizona | 0.62% | ~$2,480/yr |
| 🟢 Colorado | 0.51% | ~$2,040/yr |
| 🟢 Alabama | 0.41% | ~$1,640/yr |
| 🟢 Hawaii | 0.29% | ~$1,160/yr |
Effective rates are state medians; your local rate may differ. Source: Tax Foundation, 2025.
Property Tax Example
Texas homeowner | $350,000 home | 1.60% effective rate
- Market value: $350,000
- Assessed value (100% in TX): $350,000
- Homestead exemption: −$100,000 (Texas 2023 constitutional amendment)
- Taxable value: $250,000
- Effective rate: 1.60% → Annual property tax: $4,000
- Monthly escrow payment: ~$333/month
Key Exemptions That Reduce Your Bill
| Exemption Type | Who Qualifies | Typical Saving |
|---|---|---|
| Homestead exemption | Primary residence owners | $25k–$100k off assessed value |
| Senior exemption | Age 65+ | Varies; some states freeze assessment |
| Veteran/disability | Service members, disabled owners | Partial to 100% exemption in some states |
| Agricultural use | Farming/ranching land | Major reductions on land value |
| First-time buyer | New homeowners in select states | First year reduction/rebate |
How to Appeal Your Property Tax Assessment
- Check your assessment notice — note the appeal deadline (typically 30–90 days)
- Look up comparable sales — find 3–5 similar homes that sold recently for less than your assessed value
- Review your property card — errors in square footage, bedroom count or lot size are common
- File your appeal — most counties offer an online appeal form; fee is usually free or nominal
- Attend the hearing — present your evidence clearly; be polite and factual
- Consider a property tax consultant — they work on contingency (% of saving); worth it for high-value homes
Include property tax in your US mortgage affordability:
US Affordability Calculator → US Closing Costs →FAQs
How is property tax calculated in the US?+
Property tax = Assessed Value × Mill Rate. The assessed value is set by your local assessor (often 80–100% of market value, but varies by state). The mill rate is the tax per $1,000 of assessed value. Example: $400,000 assessed value × 20 mills (2%) = $8,000/year in property tax.
Which states have no property tax?+
All US states levy some form of property tax. However, Hawaii has the lowest effective rate (~0.29%), followed by Alabama (~0.41%) and Colorado (~0.51%). Some localities within states offer senior exemptions, veteran exemptions and homestead exemptions that can significantly reduce your bill.
Can I appeal my property tax assessment?+
Yes — most counties allow you to appeal. You typically have 30–90 days after receiving your assessment notice. Gather evidence: recent comparable sales in your area, your own independent appraisal, or photos of issues that reduce value. Many successful appeals result in meaningful reductions.
Is property tax deductible on federal taxes?+
Since the 2017 Tax Cuts and Jobs Act (TCJA), the state and local tax (SALT) deduction is capped at $10,000 per year (combined property + income/sales tax). For high-tax states like New Jersey or Illinois, many homeowners pay far more than this cap.
⚠️ Rates are state averages and vary by county and municipality. Always verify with your local assessor. Not financial advice. Sources: Tax Foundation, Lincoln Institute of Land Policy (2025).