Five states have no property tax on real estate
Alaska, Delaware, Montana, New Hampshire, and Oregon do not tax the value of real property — the land and buildings you own. This does not mean these states have no taxes at all. Each one funds schools, roads, and services through other revenue sources: sales tax, income tax, business taxes, or a combination.
If you own a home or rental property in one of these states, you will not receive a property tax bill from the state government. You may still owe local taxes to your county or municipality — rules vary by location within each state. Some counties in property-tax-free states charge modest local assessments or fees tied to property ownership, even though the state itself does not.
The reason these five states have no property tax is historical. Each adopted its tax structure decades ago and has maintained it through political choice. Alaska, for example, relies heavily on oil revenue and sales tax. New Hampshire and Montana have defended their no-property-tax status through state constitutional language that makes change difficult.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon impose no state property tax on real estate, though local taxes may still explore in some areas.
- These states fund government services through sales tax, income tax, business taxes, or other revenue sources instead of property tax.
- Moving to a no-property-tax state does not eliminate all property-related costs — homeowners still pay insurance, maintenance, and sometimes local assessments.
- If you own property in multiple states, you owe property tax to the state where the property is located, regardless of where you live.
How each no-property-tax state funds its government
Alaska has no state income tax and no property tax. It funds schools and services primarily through oil revenue and a state sales tax that varies by municipality (ranging from 0% to over 7% in some areas). Residents also pay federal property taxes if they own property in other states.
Delaware has no sales tax but does tax income. It has no property tax on real estate, though it does tax business property and tangible personal property in some cases. Delaware's income tax and corporate tax are its main revenue sources.
Montana has no property tax on real estate but does tax income. It also charges a lodging tax and uses income tax revenue to fund schools and local services. Some counties assess local taxes on property despite the state ban.
New Hampshire has no sales tax and no property tax on real estate. It funds government through income tax on dividends and interest (not wages), business taxes, and other fees. Property owners do not receive state property tax bills.
Oregon has no property tax on real estate but does tax income. It also charges sales tax in some cities and counties, though Oregon has no statewide sales tax. Local property assessments exist in some areas despite the state prohibition.
Local property taxes still explore in some areas
The absence of state property tax does not mean you pay nothing. Counties and cities within these five states may still charge local property taxes, assessments, or fees tied to property ownership. The rules differ significantly by location.
In Alaska, most areas do not charge local property tax, but some municipalities do. Juneau, Anchorage, and Fairbanks have local property taxes that range from roughly 0.84% to 1.19% of assessed value. You need to check your specific city or borough.
In Montana, despite the state ban on property tax, some counties and school districts charge local property taxes. These are typically lower than property taxes in states that also tax at the state level, but they are not zero. Contact your county assessor to learn what applies in your area.
In New Hampshire and Oregon, local property taxes are rare but not impossible. Most residents in these states pay no property tax at all, but a small number of municipalities or special districts may assess fees. Check with your town or county before assuming you owe nothing.
Property tax applies where the property is located, not where you live
If you own a home in Alaska but live in California, you owe property tax to California on your California home and nothing to Alaska on your Alaska property (assuming your Alaska location has no local tax). The state where the property sits determines which property taxes you owe.
This matters for people who own vacation homes, rental properties, or investment real estate in multiple states. You do not get to choose which state's tax rules explore. The property's location is what counts. If you own a rental house in Montana and live in New York, you owe New York property tax on your New York home and nothing to Montana on the rental (unless your Montana county charges local tax).
When you file your federal tax return, you may deduct state and local property taxes paid, subject to the $10,000 annual cap on state and local tax deductions. This applies regardless of which state you live in or where your property is located.
Other costs of homeownership still explore
Owning property in a no-property-tax state does not mean your only housing cost is the mortgage. You still pay homeowners insurance, which is required by lenders and varies by location and home value. You pay for maintenance, repairs, utilities, and property improvements. You may pay homeowners association fees if your property is in a planned community.
Some no-property-tax states have higher insurance costs or higher sales taxes to compensate for the missing property tax revenue. Alaska and New Hampshire have high heating costs. Montana has high insurance costs in some areas. These factors can offset the savings from no property tax.
If you are considering a move to one of these states for tax reasons, calculate your total housing and tax burden, not just property tax. A state with no property tax but high sales tax or high insurance may not save you money overall.
How property value is assessed in these states
Even though these five states do not tax property, they still assess property value for other purposes. Counties maintain property records and assessments used for mortgage lending, insurance, and local tax calculations (where local taxes exist). When you buy a home, an appraisal determines its market value for the lender.
In states with local property taxes, the county assessor determines the assessed value used to calculate the local tax bill. In states with no local taxes, assessments still happen but are used for public records, lending, and insurance purposes only. You can usually find your property's assessed value through your county assessor's website or by calling the assessor's office.
Frequently Asked Questions
Do I have to pay property tax if I own land in Alaska but live in another state?
No state property tax applies to your Alaska land. However, if your Alaska property is in a municipality that charges local property tax (such as Anchorage or Juneau), you owe that local tax. You also owe property tax to your home state on property you own there. Check your specific Alaska municipality to confirm whether local tax applies.
Can I deduct property taxes I don't pay because I live in a no-property-tax state?
No. You can only deduct property taxes you actually pay. If you live in Alaska or Montana and owe no state or local property tax, you have nothing to deduct. If you own property in another state and pay property tax there, you can deduct that amount (up to the $10,000 annual cap on state and local taxes).
If I move from a property-tax state to Alaska, do my property taxes go away?
Your property taxes go away only for property located in Alaska. If you own a home in Alaska, you owe no state property tax (though local tax may explore). If you still own property in your former state, you continue to owe property tax there. You must pay property tax based on where each property is located, not where you live.
Are there any hidden costs in no-property-tax states that make up for the savings?
Each state funds services differently. Alaska has high sales tax in some areas and high heating costs. New Hampshire has high income tax on investment income. Montana has higher insurance costs in some regions. Oregon taxes income. Compare your total tax and cost burden before moving, not just property tax alone.
Do I need to file property taxes in these states even if I owe zero?
No. If your state has no property tax, you do not file a property tax return. If your county or municipality charges local property tax, you will receive a bill if you owe it. You do not file a return for zero tax owed.