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See how low property taxes in Arizona are
Ask any homeowner about expenses and they’ll tell you: If you’re a first-time buyer, you need to carefully calculate the total cost of owning a home before taking the plunge into homeownership.
Owning a home comes with dozens of additional costs, from mortgage payments and interest to upkeep, renovations, and household utility bills. It doesn’t take long before expenses add up—especially when they come on top of potential property tax costs.
To determine which states offer the lowest in property taxes, Roofstock analyzed 2021 data from Wallethub and the U.S. Census Bureau. Costs were then determined for real estate property tax rates, median real estate tax payments, and median home prices for every state and Washington D.C. These amounts were then contextualized with what first-time homebuyers need to know about property taxes.
Arizona by the numbers
– Effective real estate tax rate: 0.66%
– Annual taxes on $217.5k home: $1,446
– Arizona’s median home value: $225,500
– Annual taxes on Arizona’s median home: $1,499
Homeowners in Arizona pay, on average, about $1,000 less each year than the rest of the nation. There are a few reasons for the low real estate taxes in this state. The first is that taxes are assessed by the county, district, and city based on the assessed value of the home, which in Arizona is just 10% of the limited property value. And, while tax rates in each county can change annually based on the needs of the local government, the total primary tax rate between all districts is limited to 1% of the property’s limited value for owner-occupied housing, which means that any rates that exceed that will be reduced to meet the guidelines.
That 1% cap is what helps to keep Arizona’s real estate property tax rate one of the lowest in the nation, making it much more affordable for homeowners in this state to cover their tax bills each year.
In some states, the high cost of property taxes can cause a home with an otherwise affordable price tag to be well out of someone’s price range. In others, the low cost of property taxes could give you a little more wiggle room in your budget—which is never a bad thing.
If the idea of weighing the estimated costs of property taxes seems overwhelming to you, start by looking at the states with the lowest property taxes listed below. The national list is reverse-ordered by effective real estate tax rate, with Hawaii as the state with the lowest property taxes, though the results would look different if it was ordered by the taxes on the state’s median home. Whether you’re looking for a dream home or next big investment, owning a home comes with several additional costs, property taxes being one of them.
States with the lowest property taxes
#1. Hawaii: 0.28% effective real estate tax rate
#2. Alabama: 0.41% effective real estate tax rate
#3. Colorado: 0.51% effective real estate tax rate
#4. Louisiana: 0.55% effective real estate tax rate
#5. Washington, D.C.: 0.56% effective real estate tax rate