Lowest Property Tax Rates Across America in 2025
In the United States, property tax rates vary significantly from state to state. Here's a breakdown of some key findings:
Wyoming boasts the lowest effective property tax rate in the nation at 0.48%, while Colorado and Utah follow closely with rates of 0.50% and 0.43% respectively. The Mountain State and Delaware offer tax breaks for retirees and disabled individuals, with the Mountain State exempting up to $20,000 of a home's assessed value from taxes, and Delaware providing property tax credits of up to $500 for homeowners over the age of 65.
Colorado and Utah also extend these tax breaks to veterans with disabilities. Tennessee, with an effective property tax rate of 0.46%, offers a property tax exemption for older adults and their surviving spouses worth 50% of the first $200,000 of a primary residence's actual value. Alabama's effective property tax rate is 0.42%, and the state provides a Regular Homestead Exemption for property owners under the age of 65 who are not disabled, allowing them to deduct up to $4,000 in state tax and $2,000 in county tax from their assessed value of property.
On the higher end of the spectrum, Hawaii, with a median home value of $1,280,490, has an effective property tax rate of 0.32%, making it the state with the lowest property taxes in the U.S. However, the average tax paid annually is $4,108 due to the high property values. Colorado, with a median home value of $760,134, has an average tax paid annually of $3,788.
In the South and West, states like Alabama, Idaho, and Wyoming have lower property tax rates and lower median home values. For instance, in Baldwin County, Alabama, the median home value is $211,600, and the average property tax rate is 0.36%. In Idaho, the effective property tax rate is 0.40%, with a median home value of $611,577 and an average tax paid annually of $2,430.
Notably, Gov. Jared Polis of Colorado signed a new property tax bill into law, anticipated to save homeowners and local businesses more than $1 billion annually. This bipartisan measure will prevent major property tax increases by imposing a statewide cap on annual property tax revenues and lowering assessment rates.
In contrast, states in the Northeast and Midwest tend to have higher property tax rates. West Virginia, for example, has an effective property tax rate of 0.47%, and the median property tax bill exceeded $1,000.
Property taxes are a significant source of funding for local government budgets, schools, special taxing districts, and community colleges in states like Arizona, where the effective property tax rate is 0.41%.
Rob Barber, CEO of ATTOM Data, noted that taxes have increased not just due to property appreciation, but also because of growing costs to operate local governments and schools or shifts in how tax burdens are distributed.
In Germany, the lowest property transfer tax rates in 2025 are in Bavaria at 3.5%, while the highest rates of 6.5% are in North Rhine-Westphalia, Brandenburg, Saarland, and Schleswig-Holstein.
These findings provide a useful guide for homebuyers and retirees considering a move across the United States or Germany, helping them to make informed decisions based on property tax rates and costs.
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