If you're trying to figure out which states are actually the most affordable when it comes to taxes, looking at property tax rates alone gives you an incomplete picture. Some states trade high property taxes for no income tax. Others do the reverse. And a few manage to keep both low — while funding the difference somewhere else.
Here's how the tradeoff breaks down.
The No-Income-Tax States
Nine states have no personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
That sounds like a great deal. But most of them make up the difference somewhere — and for many homeowners, that somewhere is property taxes.
Texas is the clearest example. No state income tax, but property tax rates are among the highest in the country — typically between 1.6% and 2.5% of assessed value. A homeowner with a $400,000 home in the Houston suburbs might pay $8,000 to $10,000 per year in property taxes. That's a significant monthly expense.
Florida does better. No income tax, and effective property tax rates are moderate — around 0.8% to 1.1% in most counties. The state funds itself largely through sales tax and tourism revenue, which helps keep property taxes in check. It's one of the better overall tax climates for homeowners.
Nevada also comes out well. No income tax, and property tax rates are capped by law — effective rates are typically 0.5% to 0.7%. Las Vegas homeowners often pay less in property taxes than homeowners in comparable Midwest markets.
Wyoming is genuinely low across the board. No income tax, low property tax rates (effective rates around 0.5%), and the state funds itself largely through mineral extraction taxes. Not many people live there, but the ones who do pay very little in state and local taxes.
The High-Income-Tax, Low-Property-Tax States
On the other end, some states hit you hard on income but go easier on property.
California is the most dramatic example. Top marginal income tax rate of 13.3%. But thanks to Proposition 13 — which caps assessed value increases at 2% per year — long-term homeowners often pay very low effective property tax rates. Someone who bought in the 1990s might be paying taxes on an assessed value a fraction of today's market value. New buyers don't get that benefit, but the rate itself is capped at 1%.
Hawaii has both income and property taxes, but property tax rates are the lowest in the country — effective rates around 0.3% to 0.4%. The tradeoff is that home values are extremely high, so the dollar amount can still be significant.
Alabama and Louisiana have below-average income taxes and very low property taxes. Both states fund themselves more heavily through sales taxes.
States That Are Low Across the Board
A few states manage to keep total tax burdens genuinely low:
Wyoming, Alaska, and South Dakota all rank among the lowest total tax burden states in the country. They benefit from natural resource revenues that subsidize state government.
Tennessee has no income tax on wages, moderate property taxes, and relies heavily on sales tax.
States That Are High Across the Board
New Jersey is consistently the worst of both worlds. High income tax rates, and the highest effective property tax rates in the country — often above 2% of market value. A $500,000 home in New Jersey might carry a $12,000 annual property tax bill.
Illinois is similar. High property taxes in the Chicago suburbs — effective rates of 2% or more are common — combined with a flat 4.95% income tax.
Connecticut and New York round out the expensive end of the spectrum.
The Honest Answer
The best deal on the combined tax burden depends on your income, your home value, and how you're earning money.
For retirees on fixed income with significant home equity, Florida, Nevada, or Wyoming tend to win. For high earners who rent or own modest homes, the calculus shifts. For homeowners in California who bought decades ago, Prop 13 makes the state far more affordable than its reputation suggests.
Search your county on this site to see your local property tax rates, and factor those against your state's income tax structure. The full picture is usually more nuanced than any single ranking suggests.