Property Tax by State for Landlords (2026 Data)
Property taxes are the quiet expense that decides whether a rental cash flows. Using U.S. Census data, we ranked all 50 states and Washington, DC by effective property tax rate: median real estate taxes paid as a share of median home value. Illinois has the highest effective rate at 1.92%, and Hawaii the lowest at 0.27%. The full ranked table is below.
This article is for beginner investors comparing where a rental's tax bill will help or hurt cash flow. Every figure comes from the U.S. Census American Community Survey, 2024 estimates, and is fully reproducible.
Key Takeaways
- Illinois (1.92%), New Jersey (1.89%), and Connecticut (1.66%) have the highest effective property tax rates.
- Hawaii (0.27%), Alabama (0.38%), and Idaho (0.43%) have the lowest.
- The effective rate here is median taxes divided by median value, which is comparable across states.
- A high rate can cost thousands per year and directly eats into rental cash flow.
- For a rental, property taxes are a deductible expense on Schedule E, not subject to the personal SALT cap.
- Low-tax does not mean low-cost: some low-rate states have high home prices.
Table of contents
- How we measured it
- Property tax by state: the full ranking
- What the data shows
- How property taxes hit rental cash flow
- The limits of this data
- FAQ
How we measured it
The effective property tax rate is median real estate taxes paid divided by median home value, expressed as a percent. This is more useful than the raw dollar amount, because it lets you compare a $250,000 home in Ohio to a $600,000 home in Massachusetts on equal footing. We pulled both figures from the Census ACS 2024 estimates at the state level.
A quick read of the number: at a 1% effective rate, a $300,000 property costs $3,000 a year in taxes. At 2%, the same property costs $6,000. That $3,000 difference comes straight out of your cash flow, every year.
Property tax by state: the full ranking
| Rank | State | Median home value | Median real estate taxes | Effective rate |
|---|---|---|---|---|
| 1 | Illinois | $280,700 | $5,399 | 1.92% |
| 2 | New Jersey | $496,000 | $9,358 | 1.89% |
| 3 | Connecticut | $396,900 | $6,573 | 1.66% |
| 4 | New Hampshire | $458,800 | $6,707 | 1.46% |
| 5 | New York | $449,800 | $6,542 | 1.45% |
| 6 | Vermont | $352,800 | $5,026 | 1.42% |
| 7 | Nebraska | $263,100 | $3,739 | 1.42% |
| 8 | Texas | $313,200 | $4,108 | 1.31% |
| 9 | Iowa | $227,300 | $2,937 | 1.29% |
| 10 | Kansas | $238,700 | $2,983 | 1.25% |
| 11 | Wisconsin | $294,700 | $3,680 | 1.25% |
| 12 | Ohio | $239,800 | $2,937 | 1.22% |
| 13 | Michigan | $254,200 | $2,988 | 1.18% |
| 14 | Pennsylvania | $277,600 | $3,214 | 1.16% |
| 15 | Rhode Island | $455,700 | $4,886 | 1.07% |
| 16 | Alaska | $376,500 | $3,976 | 1.06% |
| 17 | Minnesota | $344,600 | $3,501 | 1.02% |
| 18 | South Dakota | $289,600 | $2,940 | 1.02% |
| 19 | Massachusetts | $607,400 | $6,080 | 1% |
| 20 | North Dakota | $266,100 | $2,550 | 0.96% |
| 21 | Maryland | $436,300 | $4,144 | 0.95% |
| 22 | Maine | $341,900 | $3,103 | 0.91% |
| 23 | Missouri | $254,400 | $2,021 | 0.79% |
| 24 | Washington | $602,200 | $4,729 | 0.79% |
| 25 | Oregon | $497,500 | $3,895 | 0.78% |
| 26 | Florida | $396,900 | $2,993 | 0.75% |
| 27 | Oklahoma | $222,100 | $1,672 | 0.75% |
| 28 | Georgia | $343,300 | $2,554 | 0.74% |
| 29 | Indiana | $243,500 | $1,798 | 0.74% |
| 30 | Kentucky | $226,000 | $1,611 | 0.71% |
| 31 | Virginia | $403,500 | $2,872 | 0.71% |
| 32 | California | $759,500 | $5,369 | 0.71% |
| 33 | Montana | $425,400 | $2,939 | 0.69% |
| 34 | Mississippi | $186,500 | $1,221 | 0.65% |
| 35 | New Mexico | $279,900 | $1,776 | 0.63% |
| 36 | District of Columbia | $733,400 | $4,594 | 0.63% |
| 37 | North Carolina | $333,000 | $2,044 | 0.61% |
| 38 | Wyoming | $339,500 | $1,947 | 0.57% |
| 39 | Louisiana | $223,200 | $1,187 | 0.53% |
| 40 | Arkansas | $215,600 | $1,113 | 0.52% |
| 41 | West Virginia | $170,800 | $881 | 0.52% |
| 42 | Colorado | $574,600 | $2,828 | 0.49% |
| 43 | Utah | $545,200 | $2,648 | 0.49% |
| 44 | Delaware | $371,600 | $1,750 | 0.47% |
| 45 | Nevada | $455,500 | $2,143 | 0.47% |
| 46 | Tennessee | $332,600 | $1,488 | 0.45% |
| 47 | South Carolina | $299,500 | $1,337 | 0.45% |
| 48 | Arizona | $426,000 | $1,828 | 0.43% |
| 49 | Idaho | $446,400 | $1,912 | 0.43% |
| 50 | Alabama | $233,300 | $890 | 0.38% |
| 51 | Hawaii | $875,900 | $2,385 | 0.27% |
What the data shows
The high-tax states are concentrated in the Northeast and industrial Midwest: Illinois (1.92%), New Jersey, Connecticut, New Hampshire, New York, and Vermont all sit above 1.4%. These states fund a large share of local services (especially schools) through property taxes, and the bills reflect it.
The lowest rates are in the South and Mountain West: Hawaii, Alabama, Arizona, Idaho, and Tennessee all come in under 0.5%. Hawaii is the standout at 0.27%, though that low rate applies to very high home values, so the dollar bill is not as small as the rate suggests.
That last point is the key trap. A low rate on an expensive house can still be a big bill, and a moderate rate on a cheap house can be tiny. Alabama's 0.38% on a $233,300 median home is about $890 a year. New Jersey's 1.89% on a $496,000 median home is about $9,358. The rate and the price together decide the damage.
How property taxes hit rental cash flow
For a landlord, property tax is one of the largest fixed costs, and it does not care whether your unit is occupied. Consider two $300,000 rentals, identical except for location:
- In a 1.92% state (Illinois), taxes run about $5,760 a year, or $480 a month.
- In a 0.38% state (Alabama), taxes run about $1,140 a year, or $95 a month.
That $385 monthly gap can be the entire difference between a property that cash flows and one that bleeds. It is why experienced investors check the actual tax bill (and any reassessment risk after purchase) before they ever make an offer. The good news: for a rental, property taxes are fully deductible against rental income on Schedule E, which softens the blow at tax time.
The limits of this data
State medians hide a lot. Before you rely on this:
- Rates vary widely within a state. County and city levies differ, so your specific parcel may be well above or below the state median.
- Reassessment can change your bill. Some areas reassess to your purchase price, which can raise taxes sharply after you buy.
- It is one line in the analysis. Insurance, vacancy, and maintenance matter too. The national rental vacancy rate was 7.3% in early 2026 per Census data.
Use this ranking to compare states, then confirm the exact parcel-level tax bill before you buy.
Frequently Asked Questions
Which state has the highest property tax for landlords?
Illinois has the highest effective property tax rate at 1.92%, meaning median taxes equal about 1.92% of median home value, per 2024 Census data. New Jersey (1.89%) and Connecticut (1.66%) are close behind. On a $300,000 rental, a 1.92% rate is roughly $5,760 a year.
Which states have the lowest property taxes?
Hawaii has the lowest effective rate at 0.27%, followed by Alabama (0.38%) and Idaho (0.43%). Note that Hawaii's low rate applies to very high home values, so the actual dollar bill is not as small as the rate alone suggests.
Are property taxes deductible on a rental property?
Yes. For a rental, property taxes are a deductible business expense reported on Schedule E, which offsets your rental income. Unlike property taxes on a personal home, rental property taxes are not subject to the personal state and local tax (SALT) deduction cap.
How much do property taxes affect rental cash flow?
A lot. On a $300,000 rental, the difference between a 1.92% state and a 0.38% state is roughly $4,600 a year, or about $385 a month. That gap can be the entire difference between a property that cash flows and one that loses money, which is why investors check the exact tax bill before offering.
Property tax is one of the few big expenses you can check exactly before you buy, so there is no excuse for it to surprise you later. Compare states with this table, but always confirm the parcel-level bill and any reassessment risk on the specific property. The affordable, moderate-tax markets are often where beginner cash flow lives, which you can explore in the best cities for house hacking and test in the free house hacking calculator. To see how property tax fits with the other write-offs, read our rental property tax deductions guide. The 28-day course covers reading a full deal, taxes included.
