Property Taxes by State: What Homebuyers Need to Know
When you budget for a mortgage, you're probably focused on the interest rate. But property taxes can swing your monthly payment by hundreds of dollars depending on where you live. The same-priced home could cost you $97/month in Hawaii or $800/month in New Jersey — same house, different zip code. Here's what you need to know.
Effective Property Tax Rates by State
Property tax rates are expressed as a percentage of your home's assessed value. The effective rate accounts for differences between assessed and market value, giving you the true cost. Here are the highest and lowest states:
10 Highest Property Tax States
10 Lowest Property Tax States
How Property Taxes Change Your Monthly Payment
Property taxes are collected through your lender's escrow account — added to your monthly payment along with principal, interest, and insurance. On a $400,000 home, here's the monthly tax cost at different rates:
The difference between Hawaii and New Jersey on the same $400,000 home? $703/month — $8,436 per year. Over 30 years, that's $253,080 more in property taxes alone. This is why comparing homes by price alone is misleading.
Case Study: Texas — High Tax, No Income Tax
Texas has no state income tax, but property taxes are among the highest in the nation at 1.60%. On a $350,000 home in Texas, you'd pay about $5,600/year in property taxes ($467/month). That's folded into your mortgage escrow payment every month — and it increases as your home's assessed value rises.
Texas also allows homestead exemptions that reduce your taxable value, and senior citizens (65+) qualify for additional breaks. But even with exemptions, Texas property taxes remain steep. See your real numbers on our Texas mortgage calculator.
California's Proposition 13: The Cap That Matters
California's effective rate is a modest 0.71%, but here's the catch: Proposition 13 caps annual assessment increases at 2% — until the home is sold. When you buy, the home is reassessed at the purchase price. So a home that the seller was paying taxes on a $200,000 assessed value could jump to $800,000 when you buy it — quadrupling the tax bill overnight.
This is why you can't rely on the seller's current tax amounts when estimating your own costs. Always calculate based on your purchase price. Our mortgage calculator lets you plug in your exact home price and local tax rate.
Don't Forget Homestead Exemptions
Many states offer homestead exemptions that reduce your assessed value — and thus your tax bill — if the home is your primary residence. Examples:
- Florida: $50,000 homestead exemption — saves roughly $875/year on a median-priced home
- Texas: $25,000 general exemption plus $10,000 for school districts — saves about $560/year
- Georgia: Varies by county but typically $2,000–$10,000 off assessed value
Always apply for the homestead exemption when you buy — it's not automatic in most states.
How to Budget for Property Taxes
- Find your state's effective rate from the tables above.
- Multiply by your home price for annual taxes, then divide by 12 for monthly.
- Add 5–10% buffer for annual assessment increases (most areas go up 2–5% per year).
- Factor in the full PITI when comparing homes across state lines — not just the listing price.
The easiest way is to let our calculator do it for you. Enter your home price, down payment, rate, and property tax rate, and you'll see the complete monthly payment — including taxes. Check your state's page for pre-loaded rates: Texas, and more states available on our mortgage calculator.
Calculate Your Full Monthly Payment
Property taxes can make or break your housing budget, especially in high-tax states. Don't discover the real cost after closing — know your full PITI payment before you make an offer.
See Your Full Payment With Property Taxes →