Ask any homeowner about expenses and they’ll tell you: If you’re a first-time buyer, you need to carefully calculate the total cost of owning a home before taking the plunge into homeownership.
Owning a home comes with dozens of additional costs, from mortgage payments and interest to upkeep, renovations, and household utility bills. It doesn’t take long before expenses add up—especially when they come on top of potential property tax costs.
To determine which states offer the lowest in property taxes, Roofstock analyzed 2021 data from Wallethub and the U.S. Census Bureau. Costs were then determined for real estate property tax rates, median real estate tax payments, and median home prices for every state and Washington D.C. These amounts were then contextualized with what first-time homebuyers need to know about property taxes.
Mississippi by the numbers
- Effective real estate tax rate: 0.81%
- Annual taxes on $217.5k home: $1,751
- Mississippi's median home value: $119,000
- Annual taxes on Mississippi's median home: $958
Real estate taxes in Mississippi are determined by local tax authorities based on the home values in the individual counties, cities, or districts, which means the tax rate varies significantly from county to county. The overall real estate tax rate is low across the state of Mississippi, in major part, because home values are relatively low in the state—with the average median home price clocking in at just under $120,000.
Mississippi also has a number of real estate tax rules that also help to keep the overall property tax burden low across the state. For example, owner-occupied residential properties are assessed at a value that is equal to 10% of market value, which helps to cut down on what homeowners pay for property taxes. The rate for all other real estate is just 15% of the market value. Statewide exemptions, including a homestead exemption, also help to keep the property tax burdens low in Mississippi.
In some states, the high cost of property taxes can cause a home with an otherwise affordable price tag to be well out of someone’s price range. In others, the low cost of property taxes could give you a little more wiggle room in your budget—which is never a bad thing.
If the idea of weighing the estimated costs of property taxes seems overwhelming to you, start by looking at the states with the lowest property taxes listed below. The national list is reverse-ordered by effective real estate tax rate, with Hawaii as the state with the lowest property taxes, though the results would look different if it was ordered by the taxes on the state's median home. Whether you're looking for a dream home or next big investment, owning a home comes with several additional costs, property taxes being one of them.
States with the lowest property taxes
#1. Hawaii: 0.28% effective real estate tax rate
#2. Alabama: 0.41% effective real estate tax rate
#3. Colorado: 0.51% effective real estate tax rate
#4. Louisiana: 0.55% effective real estate tax rate
#5. Washington, D.C.: 0.56% effective real estate tax rate