The 10 Best States for Property Taxes
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The 10 Best States for Property Taxes

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No one loves paying taxes, but Americans find one type of tax particularly exasperating. Gallup pollsters have found that, when asked which is the worst or least fair tax, more people cite local property taxes than the federal income tax, Social Security tax, or state income and sales taxes. Those results were from a decade ago, but chances are the answers today would be much the same.

Not every one has a reason to gripe about property taxes, though. The 10 states below have the lowest property taxes as a percentage of home values, according to a ranking by the Tax Foundation.

Related: The 10 Worst States for Property Taxes

Keep in mind that low property taxes don’t necessarily mean that residents in these states bear low tax burdens overall — in some cases, they just pay higher taxes on income or consumption. Keep in mind, too, that an OECD study from 2008 found that “income taxes are generally associated with lower economic growth than taxes on consumption and property.” So don’t get too jealous as you read through this list.

1. Hawaii

Taxes as a Percentage of Home Value: 0.28 percent

Median Property Tax Paid on Homes: $1,389

Median Home Value: $500,000

Even though Hawaii boasts the lowest property tax in the nation, its personal income tax ranks second highest among states that levy one, according to the Tax Foundation — and the cost of living in the Aloha State is much higher than the national average.

2. Alabama

Taxes as a Percentage of Home Value: 0.43 percent

Median Property Tax Paid on Homes: $532

Median Home Value: $122,700

In 2012, Alabama collected the lowest national average in property tax per person. The state also has a general sales tax about 2 percentage points below the national median of 5.95 percent. Overall, Alabama residents had the 10th lowest state and local tax burden as of 2011, the Tax Foundation says.

3. Louisiana

Taxes as a Percentage of Home Value: 0.51 percent

Median Property Tax Paid on Homes: $714

Median Home Value: $140,300

Not only does Louisiana have the third lowest property tax, but it also offers a tax break known as “Restoration Tax Abatement.” The program gives landowners, both big and small, a tax break based on the dollar value of the property renovations they’ve made. The idea behind the tax break is to encourage property and infrastructure revitalization, from homes to commercial structures.

Related: The 10 Worst States for Taxes in 2015

4. Delaware

Taxes as a Percentage of Home Value: 0.55 percent

Median Property Tax Paid on Homes: $1,240

Median Home Value: $226,200

With the state facing a continued budget crunch, a bipartisan panel created by Democratic Gov. Jack Markell has said that raising property taxes or creating a state-level tax “would likely be the best available revenue source on which to place greater emphasis,” as other sources of tax revenue tend to be more volatile.

5-Tie. District of Columbia

Taxes as a Percentage of Home Value: 0.57 percent

Median Property Tax Paid on Homes: $2,693

Median Home Value: $470,500

It’s hard to compare the District of Columbia to states because of its structure as a state-local entity and because it’s so heavily urbanized, the Tax Foundation says. Still, if D.C. were a state its property tax collections per capita would rank highest in the nation, according to the Foundation.

5-Tie. South Carolina

Taxes as a Percentage of Home Value: 0.57 percent

Median Property Tax Paid on Homes: $788

Median Home Value: $139,200

In 2006, South Carolina shifted the source of funding for its schools from homeowner property tax revenues to sales taxes. But that’s left businesses fuming; a national study released last year found that businesses are responsible for a larger share of property taxes in South Carolina than in all but three other states. The state government is facing pressure to repeal the 2006 law, which could potentially raise homeowners’ property taxes.

The 10 Best States for Taxes in 2015

7. West Virginia

Taxes as a Percentage of Home Value: 0.59 percent

Median Property Tax Paid on Homes: $605

Median Home Value: $103,200

West Virginians paid an average of $773 in property taxes per person in 2012, the 7th lowest total in the country and about 54 percent of the national average.

8. Wyoming

Taxes as a Percentage of Home Value: 0.61 percent

Median Property Tax Paid on Homes: $1,195

Median Home Value: $195,500

The Rocky Mountain states as a group have some of the lowest property tax rates in the country, but the Tax Foundation notes that Wyoming state and local governments collected about $2,300 per person in property taxes in 2012, which was 5th highest in the country. Still, as of 2011 Wyoming residents faced the lowest state and local tax burden in the nation.

9. Colorado

Taxes as a Percentage of Home Value: 0.61 percent

Median Property Tax Paid on Homes: $1,479

Median Home Value: $240,500

Rising property values mean homeowners in the Mile-High State are about to take a hit. “Property values across the metro area are popping through the roof, and owners should prepare for higher property taxes in the years ahead,” the Denver Post reported earlier this year.

10. Arkansas

Taxes as a Percentage of Home Value: 0.62 percent

Median Property Tax Paid on Homes: $674

Median Home Value: $109,500

Arkansas was named the worst state to retire for 2015 according to Bankrate. Even though residents have a low cost of living, thanks in part to low property taxes, the state received low marks in every other category, including weather.

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