Key Takeaways
- Alaska, Delaware, Hawaii, Idaho, Louisiana, Mississippi, Nevada, South Dakota, and Wyoming have no statewide property tax on real estate.
- These states replace property tax revenue with sales tax, income tax, business taxes, or other sources — the total tax burden varies widely by state.
- Some no-property-tax states still allow counties or municipalities to impose local property taxes, so you must check your specific county.
- Moving to a no-property-tax state for tax reasons requires comparing your total state and local tax burden, not just property tax alone.
- If you own property in a state with property tax and move to a no-property-tax state, you do not owe property tax on your old home after you sell it.
The Nine States with No Property Tax
Alaska, Delaware, Hawaii, Idaho, Louisiana, Mississippi, Nevada, South Dakota, and Wyoming do not impose a statewide property tax on real estate. This list has remained stable for decades — no state has eliminated property tax recently, and no state is moving toward elimination in the near term.
The reason these states stand apart is historical and structural. Most developed states rely on property tax as a stable, predictable revenue source for schools, roads, and local services. These nine states chose different paths: some have oil or mineral wealth (Alaska), some have tourism and gambling (Nevada), and others built their budgets around sales tax or business taxes instead. The choice was made long ago and embedded in state constitutions, making it difficult to reverse.
However, the absence of statewide property tax does not mean your property is untaxed. Counties, cities, and school districts in these states may still impose local property taxes. For example, Hawaii has no statewide property tax but does allow counties to tax real estate. Alaska allows municipalities to tax property. You must check your specific county or city to know what you actually owe.
How These States Fund Schools and Services Without Property Tax
States without property tax must raise revenue somewhere else. The methods vary, and the total tax burden you face depends on how your state chose to replace that revenue.
Sales tax is the most common substitute. Nevada, South Dakota, and Wyoming have no income tax and no property tax, so they rely heavily on sales tax — which can reach 8 to 9 percent when you add local rates. If you spend a lot, you pay more. If you save or invest, you pay less.
Income tax is another route. Alaska, Hawaii, and Louisiana have no property tax but do tax wages, business income, or both. Delaware taxes income but not property. The rates vary by state and income level.
Business and corporate taxes fund some of these states' budgets. Nevada and Wyoming use this approach heavily, taxing businesses instead of individuals. If you are self-employed or own a business, you may pay more in business taxes than you would in property tax elsewhere.
Oil and mineral revenue is unique to Alaska, which uses oil taxes and royalties to fund the state budget. This is not a model other states can replicate.
The practical result: moving to a no-property-tax state does not automatically lower your taxes. A person earning $100,000 in Nevada (no income tax, high sales tax) may pay more total tax than someone earning the same amount in a state with moderate property tax and lower sales tax. Compare your actual tax burden, not just the property tax line.
Local Property Taxes in No-Property-Tax States
Even in states with no statewide property tax, your county or city may still tax real estate. This is a critical detail that surprises many people considering a move.
In Alaska, the state does not tax property, but municipalities can and do. Anchorage, Juneau, and other cities impose local property taxes. The rates vary by municipality.
In Hawaii, the state does not tax property, but counties do. Hawaii's property tax rates are among the lowest in the nation, but they exist. You will owe tax to your county.
In Delaware, Idaho, Louisiana, and Mississippi, the state does not tax property, and most local jurisdictions do not either. However, you should verify your specific county or city before assuming you owe nothing.
In Nevada, South Dakota, and Wyoming, neither the state nor most local jurisdictions tax property. These three come closest to truly having no property tax at any level, though some small municipalities may have local taxes. Check your specific city or county before buying.
The lesson: "no property tax state" is shorthand. Always confirm what your specific county or city taxes before making a financial decision based on property tax alone.
What Happens to Your Old Home's Property Tax When You Move
If you own a home in a state with property tax and move to a no-property-tax state, you do not owe property tax on your old home after you sell it. Once the sale closes and the deed transfers to the new owner, you have no tax obligation on that property.
If you own the old home and rent it out instead of selling, you still owe property tax on it in the state where it sits. The tax obligation follows the property, not the owner's residence. Moving to a no-property-tax state does not shield you from property tax on real estate you own elsewhere.
If you own property in multiple states, each state taxes the property located within its borders. You cannot avoid property tax by moving to a no-property-tax state if you keep property in a state that does tax it.
Comparing Total Tax Burden Across States
The decision to move for tax reasons should rest on your total tax bill, not on property tax alone. A state with no property tax but high sales tax or income tax may cost you more than a state with moderate property tax and lower other taxes.
Consider your situation: If you are retired and live on investment income, Alaska's lack of income tax is valuable. If you spend heavily on goods and services, Nevada's high sales tax may offset the savings from no property tax. If you earn wages, Delaware's income tax may matter more than the absence of property tax.
Use a tax calculator or consult a tax professional who knows both your current state and the state you are considering. Compare your estimated property tax, income tax, sales tax, and any other state taxes in both places. The total number, not any single line, tells you whether moving makes financial sense.
Property Tax Exemptions and Deferrals in These States
Even though these nine states do not tax property statewide, some offer exemptions or deferrals for specific groups — usually seniors, veterans, or people with disabilities — if their county or city does impose local property tax.
In Hawaii, for example, counties may offer homeowner exemptions or deferrals for seniors. In Alaska, municipalities may offer similar programs. The specifics depend on your county or city and your personal circumstances.
If you live in a no-property-tax state but your county does tax property, and you think you might may have access to for an exemption, contact your county assessor's office. They can tell you what programs exist and what documents you need.
Frequently Asked Questions
Do I have to pay property tax if I buy a house in Nevada or South Dakota?
No statewide property tax applies in either state. However, check your specific city or county — a small number of local jurisdictions in these states do impose property tax. Contact your county assessor before buying to confirm your exact obligation.
If I move from California to Alaska, do I stop owing property tax when ready?
You stop owing property tax on any California property once you sell it and the deed transfers. If you keep California property and rent it out, you still owe California property tax on that specific property. Alaska has no property tax on your new home there, but the tax obligation on out-of-state property does not disappear when you move.
Are property taxes really zero in Hawaii?
Hawaii has no statewide property tax, but counties do tax real estate. Hawaii's property tax rates are among the lowest in the nation — typically under 0.3 percent of home value — but they are not zero. Confirm your county's rate before buying.
Which no-property-tax state has the lowest overall taxes?
That depends on your income, spending, and life situation. Nevada and South Dakota have no income tax or property tax but high sales tax. Alaska has no income tax or property tax. Compare your specific tax bill in each state rather than relying on headlines.
Can I deduct property tax on my federal return if I live in a no-property-tax state?
If your state or local government does not tax property, you have no property tax to deduct. You can deduct other state and local taxes — income tax or sales tax — up to $10,000 per year on your federal return, but only if you itemize deductions.