Five states have no property tax on real estate
Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge property tax on real estate. These are the only five states in the country with this structure. However, "no property tax" does not mean no taxes at all — each of these states funds schools and local services through other revenue sources, and some charge taxes on other things you own or income you earn.
If you own a home in one of these states, you will not receive a property tax bill from your county or municipality based on your home's value. This is fundamentally different from the other 45 states, where property tax is the primary way local governments fund schools, roads, and public services.
The reason these five states have no property tax varies by state history and politics. Some adopted this policy decades ago; others have maintained it through constitutional amendment. Understanding how each state replaced that revenue is important if you are considering a move or trying to understand your total tax burden.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon are the only states without property tax on real estate.
- States without property tax fund schools and services through sales tax, income tax, or other revenue sources instead.
- No property tax does not mean lower overall taxes — some of these states have higher income or sales taxes to compensate.
- Property tax rules can change, and some states have exemptions or special assessments that function similarly to property tax.
Alaska: No property tax, funded by oil revenue
Alaska has no state property tax and no state income tax. The state funds most of its budget through oil revenue — specifically taxes and royalties on oil extracted from state lands. This unique revenue source has allowed Alaska to avoid both major tax categories that most states rely on.
However, Alaska does allow municipalities to charge local property taxes. Anchorage, Juneau, and other cities may assess property tax on real estate within their boundaries, even though the state does not. If you own property in an Alaskan city, check with that city's assessor to learn whether property tax applies where you live.
Alaska also charges sales tax in most areas, though the rate and what is taxed varies by municipality. Some towns have no sales tax at all. There is no state sales tax, but local governments set their own rates.
Delaware: No property tax, funded by corporate taxes and income tax
Delaware has no property tax on real estate. The state instead relies heavily on corporate income tax and personal income tax. Delaware is known for having business-friendly corporate tax laws, which brings significant revenue to the state.
Delaware does charge a 6% sales tax on most purchases, though some items like groceries are exempt. The state also taxes income at rates ranging from 2.2% to 5.75% depending on your income bracket.
Like Alaska, Delaware allows local governments to impose additional taxes, but property tax on real estate is not one of them. If you own a home in Delaware, your primary tax obligation to the state will be income tax and sales tax, not property tax.
Montana: No property tax on primary residences, but taxes other property
Montana is the most complex of the five. The state has no property tax on your primary residence — the home where you live. However, Montana does tax other real estate, including rental properties, vacant land, and commercial buildings. If you own only your home and nothing else, you pay no property tax. If you own investment property or a second home, that property is taxed.
Montana funds schools and local services through a combination of income tax, sales tax, and taxes on specific industries like mining and timber. The state income tax ranges from 1% to 6.9% depending on your bracket.
Montana also charges a 0% to 11% sales tax depending on the county and what you are buying. Some counties have no sales tax; others tax groceries and other necessities.
New Hampshire: No property tax on real estate, but taxes income and other assets
New Hampshire has no property tax on real estate. However, the state taxes income in a specific way: it taxes interest and dividend income but not wages. This means if you earn money from investments, you owe state tax; if you earn a salary, you do not.
New Hampshire also charges a 6% sales tax on most purchases, though groceries and clothing are exempt. The state has no income tax on wages, which is why it is sometimes called a "no income tax" state — but that description is incomplete because investment income is taxed.
New Hampshire funds schools and local services through this combination of investment income tax, sales tax, and other revenue sources. Property owners in New Hampshire do not receive property tax bills from the state.
Oregon: No property tax on primary residences under certain conditions
Oregon has no property tax on your primary residence if you meet specific conditions. You must own and occupy the home as your principal place of residence, and you must have owned it for at least three years (with some exceptions for new residents). If you meet these conditions, your home is exempt from property tax.
Oregon does tax other real estate — rental properties, vacation homes, and commercial buildings are all subject to property tax. The state also charges income tax at rates ranging from 4.75% to 9.9% depending on your bracket, and a 0% to 9.45% sales tax depending on the county.
Oregon funds schools and local services primarily through income tax and sales tax. If you own only your primary residence and meet the residency requirements, you will not pay property tax on it.
How states without property tax replace that revenue
Property tax is the largest source of funding for schools and local government in most states. States without property tax must replace that revenue somehow. The methods vary:
- Income tax: Delaware, Montana, New Hampshire, and Oregon all use income tax to fund schools and services. Rates vary by state and income level.
- Sales tax: All five states except Alaska charge sales tax. Alaska allows municipalities to set their own sales tax rates.
- Resource extraction: Alaska uses oil revenue. Montana also taxes mining, timber, and other natural resource industries heavily.
- Corporate tax: Delaware relies significantly on corporate income tax from businesses incorporated in the state.
- Other sources: All five states use vehicle registration fees, business licenses, and other smaller revenue sources.
The result is that living in a state without property tax does not necessarily mean paying less total tax. Some of these states have higher income or sales taxes than neighboring states with property tax. Your total tax burden depends on your specific situation — how much you earn, how much you spend, and what you own.
What to know if you own property in one of these states
If you own real estate in Alaska, Delaware, Montana, New Hampshire, or Oregon, you will not receive a property tax bill from the state. However, you should still understand your local tax obligations. Some municipalities within these states do charge property tax, and all of them charge other taxes.
Contact your county assessor or local tax office to confirm whether property tax applies to your specific property. Ask about any exemptions or special assessments that might explore. Even in states without property tax, some properties may be subject to special district taxes for schools, fire protection, or water systems.
Keep in mind that property tax rules can change. States occasionally modify their tax structures, and exemptions sometimes expire or are modified. If you are planning a move or making a long-term financial decision based on property tax, confirm the current rules with your local tax office rather than relying on historical information.
Frequently Asked Questions
Do any other states have no property tax?
No. Only Alaska, Delaware, Montana, New Hampshire, and Oregon have no state property tax on real estate. All other states charge property tax, though rates and assessment methods vary widely. Some states have lower property tax rates than others, but none are completely without it.
If a state has no property tax, are taxes lower overall?
Not necessarily. States without property tax often have higher income tax or sales tax to compensate. For example, Oregon's income tax is higher than many states with property tax. Your total tax burden depends on your income, spending, and what you own — not just whether property tax exists.
Can I avoid property tax by moving to one of these states?
You can avoid state property tax, but some municipalities within these states do charge local property tax. Alaska and Montana allow cities to set their own property tax rates. Check with your specific city or county before moving. Also consider that you may pay more in income or sales tax instead.
What happens if I own property in multiple states?
You owe property tax in each state where you own real estate, based on that state's rules. If you own a home in Oregon (no property tax on primary residence) and a rental property in California (property tax applies), you would pay property tax only on the California property. Each property is taxed according to the state where it is located.
Are there any exemptions to property tax in states that have it?
Yes. Most states offer exemptions for primary residences, senior citizens, disabled veterans, and nonprofit organizations. Some states also offer temporary exemptions for new construction or agricultural land. These exemptions vary widely by state and sometimes by county. Check your state's tax assessor website for details about exemptions where you live.