What Are the Top 10 States with Lowest Property Tax Rates in 2018?

What are the states with lowest property tax rates in the US housing market for 2018?

Real estate property taxes can be a major expense when owning a house depending on where you live. If you’re a real estate investor, then you should always consider your options when it comes to states with lowest property tax rates. Investing in these states can be a smart move if you’re trying to cut back on your expenses, especially property taxes.

According to the US Census Bureau, the average American household spends around $2,197 on real estate property taxes each year. And while this might seem like it only applies to homeowners, in reality, these taxes affect renters as well. When a homeowner rents out their property, the amount of rent that they set for the property will depend heavily on the costs of the expenses that they will have to pay, including property taxes.

However, property taxes are not the only thing that real estate investors should take into consideration. For example, investing in a state where property taxes are low, but property prices are extremely high, as in the case of Hawaii, can be misleading.

Hawaii is the #1 state on the list of states with lowest property tax rates, sitting at 0.27% real estate property tax rate. On the other hand, though, Hawaii is also the #1 state when it comes to the highest property prices where the median home value is $538,400.

For this reason, real estate investors have to find the balance between the amount of property tax that they want to pay vs. the median price of the property that they want to buy.

In this article, we will be listing the top 10 states with lowest property tax rates in the US based on the data collected by WalletHub to help you find your next market for investing in the US housing market 2018.

So, without further ado, here are the top 10 states with lowest property tax rates in the US

States with Lowest Property Tax Rates – Hawaii

Effective real estate tax rate: 0.27%
Annual tax on $185K home: $501
State median home value: $538,400 (highest)
Annual tax on a home priced at state median value: $1,459 (19^th highest)
Median household income: $74,511 (5^th highest)

States with Lowest Property Tax Rates – Alabama

Effective real estate tax rate: 0.43%
Annual tax on $185K home: $791
State median home value: $128,500 (8^th lowest)
Annual tax on a home priced at state median value: $550 (lowest)
Median household income: $46,257 (5^th lowest)

States with Lowest Property Tax Rates – Louisiana

Effective real estate tax rate: 0.51%
Annual tax on $185K home: $934
State median home value: $148,300 (18^th lowest)
Annual tax on a home priced at state median value: $750 (4^th lowest)
Median household income: $45,146 (4^th lowest)

States with Lowest Property Tax Rates – Delaware

Effective real estate tax rate: 0.55%
Annual tax on $185K home: $1,009
State median home value: $233,100 (16^th highest)
Annual tax on a home priced at state median value: $1,274 (13^th lowest)
Median household income: $61,757 (15^th highest)

States with Lowest Property Tax Rates – District of Colombia

Effective real estate tax rate: 0.56%
Annual tax on $185K home: $1,026
State median home value: $506,100 (2^nd highest)
Annual tax on a home priced at state median value: $2,811 (14^th highest)
Median household income: N/A

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States with Lowest Property Tax Rates – Colorado

Effective real estate tax rate: 0.57%
Annual tax on $185K home: $1,058
State median home value: $264,600 (10^th highest)
Annual tax on a home priced at state median value: $1,516 (22^nd lowest)
Median household income: $65,685 (12^th highest)

States with Lowest Property Tax Rates – South Carolina

Effective real estate tax rate: 0.57%
Annual tax on $185K home: $1,056
State median home value: $143,600 (15^th lowest)
Annual tax on a home priced at state median value: $821 (5^th lowest)
Median household income: $49,501 (10^th lowest)

States with Lowest Property Tax Rates – West Virginia

Effective real estate tax rate: 0.59%
Annual tax on $185K home: $1,082
State median home value: $107,400 (2^nd lowest)
Annual tax on a home priced at state median value: $629 (2^nd lowest)
Median household income: $43,385 (2^nd lowest)

States with Lowest Property Tax Rates – Wyoming

Effective real estate tax rate: 0.61%
Annual tax on $185K home: $1,130
State median home value: $199,900 (19^th highest)
Annual tax on a home priced at state median value: $1,223 (11^th lowest)
Median household income: $59,882 (19^th highest)

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States with Lowest Property Tax Rates – Arkansas

Effective real estate tax rate: 0.63%
Annual tax on $185K home: $1,161
State median home value: $114,700 (3^rd lowest)
Annual tax on a home priced at state median value: $721 (3^rd lowest)
Median household income: $44,334 (3^rd lowest)

To Sum Up

As you can notice from this list, the placement of each state varies widely when it comes to the different values. Although Hawaii has the lowest property tax rates in the US, for example, it also has the highest median home value. This, however, is slightly balanced for the residents of that state when considering that their median household income is among the top 5 highest nationwide.

Whichever state that you choose for buying a real estate investment property, make sure to do your research to determine the best cities and neighborhoods within that state for investing in real estate.

Also, check out our list of the top 10 states with highest property tax rates in the US.

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