Lowest Property Tax States With No Income Tax

Lowest Property‑Tax States for Residents Without a State Income Tax

Why property tax matters when you live in a no‑income‑tax state
When a state does not levy an individual income tax, the burden of funding public services—schools, roads, public safety, and social programs—shifts more heavily onto other revenue sources. Property tax is the primary alternative levy, so the effective property‑tax rate becomes a key component of the overall tax climate for homeowners. Understanding which no‑income‑tax states have the lowest effective property‑tax rates helps residents and prospective buyers gauge the total cost of homeownership in jurisdictions that rely on property taxes to replace lost income‑tax revenue.

According to the U.S. Census Bureau's 2023 American Community Survey (5‑year estimates), the national average effective property‑tax rate is 0.97 %, based on a median home value of $318,381 and a median annual property tax of $2,993. The table below compares the nine no‑income‑tax states with the lowest effective property‑tax rates.

*Estimated annual tax is calculated by applying the average effective property‑tax rate to the median home value for each state (e.g., Nevada: 0.49 % × $406,100 ≈ $1,970).

Context for No‑Income‑Tax States

• Nevada – With an effective rate of 0.49 %, Nevada’s property tax is well below the national average. The state compensates for the lack of income tax through tourism and gaming revenues, allowing a relatively low property‑tax burden for homeowners.

• Tennessee – Tennessee’s 0.55 % rate reflects its reliance on sales tax (including the Hall income tax on dividends, which was fully repealed in 2021). The low property tax contributes to the state’s overall tax‑friendly reputation for retirees and remote workers.

• Wyoming – Wyoming’s 0.58 % rate is supported by substantial mineral royalties and a modest sales tax, keeping property taxes modest despite the absence of an income tax.

• Florida – While Florida’s effective rate (0.79 %) is higher than the three states above, it remains below the national average. The state’s tourism industry and a relatively high sales tax offset the missing income tax.

• Washington – Washington’s 0.84 % rate is close to the national average, but the state’s sizable sales tax and business taxes (including the B&O tax) enable it to function without a personal income tax.

• South Dakota – At 1.09 %, South Dakota’s property tax is slightly above the national average, yet the state’s reliance on sales tax and the absence of an income tax keep the overall tax burden moderate.

• Alaska – Alaska’s 1.14 % rate is driven by the high cost of delivering services across a vast, sparsely populated area. The state’s oil revenues and the Permanent Fund Dividend partially replace income‑tax revenue.

• Texas – Texas has the highest effective property‑tax rate among the listed states (1.58 %). The state’s large population and extensive public services are funded primarily through property taxes, compensating for the lack of a personal income tax.

• New Hampshire – New Hampshire’s 1.77 % rate is the highest in this group and exceeds the national average. The state funds its budget through a combination of property taxes, a relatively high sales tax on prepared foods, and taxes on interest and dividends.

How the Data Were Derived

• Source – All figures are based on the U.S. Census Bureau’s 2023 American Community Survey (5‑year estimates).
• Effective property‑tax rate – Calculated as median annual property tax divided by median home value, expressed as a percentage.
• Median home value and estimated annual tax – Reported directly from the ACS tables for each state.

Use of the Information

The table and accompanying context provide a baseline for comparing the property‑tax component of the overall tax burden in states that do not levy a personal income tax. Homebuyers, retirees, and remote workers can use these data to assess how much of their housing cost is likely to be devoted to property taxes, independent of income‑tax considerations.

All values are rounded to the nearest whole dollar or tenth of a percent for clarity.