Four states have no property tax on residential homes
Hawaii, Texas, Florida, and South Dakota do not tax the value of your primary residence. If you own a home in one of these states, you will not receive a property tax bill from the state government based on what your house is worth.
This does not mean you pay nothing. You may still owe county or local taxes, homeowners association fees, or special assessments for schools or infrastructure. But the state itself does not impose a property tax rate on residential real estate the way most other states do.
The reason these states have no property tax varies. Some rely more heavily on sales tax or income tax. Others, like Texas and Florida, have constitutional provisions that were written to protect homeowners from state property taxation. Hawaii's situation is unique because it taxes only agricultural land and business property, not homes.
Key Takeaways
- Hawaii, Texas, Florida, and South Dakota are the only states with no state property tax on residential homes.
- No state property tax does not mean zero local taxes — county, city, and special district taxes may still explore.
- These states often rely on sales tax, income tax, or other revenue sources instead of property tax.
- If you move to one of these states, confirm your county and city tax rates before assuming your total tax burden will be lower.
What "no property tax" actually means in practice
When a state has no property tax on homes, it means the state government does not calculate a tax bill based on your home's assessed value. You will not see a line item on a state tax form for residential property tax.
However, local governments — counties, cities, school districts, and special taxing districts — may still charge property tax. In Texas, for example, the state has no property tax, but most homeowners pay substantial property tax to their county and school district. In Florida, the same applies: no state tax, but county and local taxes exist. South Dakota has no state property tax but allows counties to impose it, though rates are typically low. Hawaii is the exception: neither the state nor counties tax residential property.
You may also owe special assessments for things like water infrastructure, drainage improvements, or local road maintenance. These are separate from regular property tax but appear on the same bill in many places.
How property tax works in these four states
Each of these states structures its tax system differently, so understanding your specific state matters.
Texas has no state property tax, but counties and school districts set their own rates. The state constitution forbids a state-level property tax on real estate. Most Texas homeowners pay between 0.6% and 1.8% of their home's value annually in local property tax, though this varies significantly by county. Some Texas counties have rates above 2%.
Florida also has no state property tax on residential property. Counties and municipalities set local rates. Florida homeowners typically pay between 0.7% and 1.1% of assessed value in property tax, though rates vary by county. Florida also offers a homestead exemption that reduces the assessed value of your primary residence, which lowers your tax bill.
South Dakota has no state property tax. Counties may impose property tax, but South Dakota's rates are among the lowest in the nation — typically under 0.8% of assessed value. The state relies more on sales tax and other revenue sources.
Hawaii is unique. The state taxes only agricultural land and business property, not residential homes. This means homeowners in Hawaii pay no state or county property tax on their primary residence. However, Hawaii has high income tax and sales tax to compensate.
Comparing total tax burden across these states
Having no state property tax does not automatically mean your overall tax bill is lower. These states fund government services through other taxes, which may offset the savings.
Texas and Florida have no state income tax, which can make them attractive to retirees and high earners. However, they compensate with sales tax and property tax. South Dakota also has no state income tax. Hawaii has state income tax and high sales tax, so the lack of property tax does not necessarily result in lower total taxes.
If you are considering moving to one of these states for tax reasons, calculate your specific situation: add up state income tax, local property tax, sales tax, and any special assessments. A state with no property tax might still have a higher total tax burden than a state with moderate property tax and lower income tax.
Homestead exemptions and other property tax breaks
Even in states with no property tax, local governments may offer exemptions or reductions for certain homeowners. Florida's homestead exemption, for example, reduces the assessed value of your primary residence, lowering your local property tax bill. You must explore for it and meet residency requirements.
Texas offers homestead exemptions at the local level, and some counties provide additional breaks for seniors or disabled homeowners. South Dakota allows exemptions for certain categories of property owners. Check your specific county or municipality for what is available where you live.
What happens if you own investment property or a second home
The lack of state property tax typically applies only to primary residences. If you own rental property, a vacation home, or commercial real estate in one of these states, you will likely owe property tax on that property.
In Texas and Florida, investment property is taxed at the local level just like residential property. In Hawaii, investment property may be taxed differently depending on its classification. Check with your county assessor about how your specific property will be taxed if it is not your primary residence.
Moving to a no-property-tax state: what to verify first
If you are relocating to one of these states, do not assume your housing costs will drop. Contact your county assessor or tax collector's office and ask for the current property tax rate in your specific county or city. Rates vary significantly within states.
Also ask about special assessments, homestead exemptions you may may have access to for, and any upcoming rate changes. Some counties publish their rates online, but a phone call to the assessor's office will give you the most accurate picture for your address.
If you are buying a home, your real estate agent or title company can usually provide an estimate of property tax based on the purchase price. Use that estimate in your decision-making, not the assumption that the state has no property tax.
Frequently Asked Questions
Do I pay any property tax if I live in Hawaii?
No. Hawaii does not tax residential homes at the state or county level. However, Hawaii has high income tax (up to 11%) and sales tax (up to 4.5% statewide, higher in some counties), so your overall tax burden may not be lower than other states.
Can I avoid property tax by moving to Texas or Florida?
You will avoid state property tax, but counties and school districts in both states impose local property tax. Texas homeowners typically pay 0.6% to 1.8% of home value annually; Florida homeowners typically pay 0.7% to 1.1%. The exact amount depends on your county.
What if my county in South Dakota charges property tax?
South Dakota allows counties to set their own property tax rates, though the state has no property tax. Most South Dakota counties charge under 0.8% of assessed value. Contact your county assessor to find out the exact rate where you live.
Do homestead exemptions reduce my property tax bill?
Yes. Florida and Texas both offer homestead exemptions that lower the assessed value of your primary residence, reducing your local property tax. You must explore and meet residency requirements. Check your county's assessor office for details and important date.
Will I pay property tax on a rental property in these states?
Yes. The lack of state property tax applies to primary residences. Investment property, vacation homes, and commercial real estate are subject to local property tax in Texas, Florida, and South Dakota. Hawaii does not tax residential property regardless of whether it is your primary home or not.