Sadly for investors, the answer is no, there are no states without property tax. This is because property tax is a useful way for local governments to fund public services such as schools, fire and police departments, infrastructure and libraries.
Which Are the Tax-Free States? Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the only states that do not levy a state income tax. Note that Washington does levy a state capital gains tax on certain high earners.
These include taxes charged by your city, county, local government, area school district, local utility district, and your state. There are no states where you can avoid property taxes altogether, but there are many that have no state-level taxes (you'll still pay local taxes, though).
As a senior citizen, you probably will end up paying property taxes for as long as you are a homeowner. However, depending on the state you live in and often once you hit your 60s (usually around the ages of 61 to 65), you may be eligible for a property tax exemption.
Some types of properties are exempt from real estate taxes. These include qualifying nonprofit, religious and government properties. Senior citizens, veterans and those eligible for STAR (the School Tax Relief program) may qualify for exemptions as well. There's often an exemption application process.
State governments rely on different types of taxes
Note that local sales taxes and local property taxes aren't included. Four pie charts comparing states show Florida and Washington state, both with no personal income tax, getting about 80% of their revenue from sales tax.
Source: US Census Bureau, 2022 American Community Survey; Tax Foundation calculations. In calendar year 2022 (the most recent data available), New Jersey had the highest effective rate on owner-occupied property at 2.08 percent, followed by Illinois (1.95 percent) and Connecticut (1.78 percent).
1. Senior Citizen Homeowners' Property Tax Exemption. The Senior Citizen Homeowners' Property Tax Exemption is available to homeowners who are at least 65 years old and meet certain income requirements.
Eight U.S. states currently have no state income tax whatsoever: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. New Hampshire, the ninth state on our list, only taxes interest and dividend income.
Florida Property Taxes
Property taxes in Florida come in a bit below national averages. The state's average effective property tax rate is 0.80%, which is lower than the U.S. average (0.99%). The typical homeowner in Florida pays $2,338 annually in property taxes, although that amount varies greatly between counties.
The No. 1 most expensive state is Hawaii, according to Stacker, which analyzed the rankings based on the cost of living by The Council for Community & Economic Research.
It's no secret why Florida continues to be one of the best states to retire in 2024. With a warm and sunny climate, retirees enjoy Florida's beautiful beaches and outdoor activities year-round. From the Gulf Coast to the Atlantic, Florida offers endless opportunities for leisure.
1. Hawaii. Hawaii had the lowest effective property tax rate in the country in 2023. 2 It also has the highest typical home value of the 10 states on our list, which means that homeowners in this state may still be on the hook for a hefty tax bill.
Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming are the top tax-friendly states for retirees. All of them have no personal income taxes.
Real property actually and exclusively used for cemetery purposes shall be exempt from taxation and exempt from special ad valorem levies and special assessments.
You are 65 years of age, or older, on January 1; You qualify for, and receive, the Florida Homestead Exemption; Your total 'Household Adjusted Gross Income' for everyone who lives on the property cannot exceed statutory limits.
As an individual, your deduction of state and local income, general sales, and property taxes is limited to a combined total deduction of $10,000 ($5,000 if married filing separately).