Settling Down in 2026? These Are the Best and Worst States for Property Owners

For many Americans, “What do you want to be when you grow up?” has morphed into a more pressing question: “Can I actually afford to grow up?” With the cost of living climbing, putting down roots can feel out of reach. But having a roof over your head—and a ride in the driveway—isn’t equally daunting everywhere. In some states, lower property taxes make life a little easier on your wallet.

Of course, taxes aren’t the only thing to consider. School quality, safety, and space for life’s needs often come first. Still, property tax rates—both on homes and vehicles—quietly shape what you can afford and where you can comfortably settle down. Using WalletHub’s latest rankings, we’ll reveal which states are the most—and least—taxing for property owners in 2026.

House Hunting's Hidden Cost

Dreaming of a beach house in Hawaii? Your pocketbook might actually approve. When comparing typical home taxes to home values, the “Aloha State” tops the list with the lowest effective real-estate tax rate: just 0.27%. That adds up to only $888 a year on a typical $332,700 home, and even at Hawaii’s median home price of $839,100, taxes come to around $2,239 annually—not too far off from the national average of $3,119.

Close behind is Alabama, with the second-lowest effective rate of 0.38%. But because Alabama’s median home value is well below the national median ($209,900), the average homeowner actually pays the lowest real-estate property taxes in the country: just $788 per year.

Nevada takes third, with taxes on a median-value home coming to $2,027 annually, keeping property ownership more manageable than in the highest-tax states.

Of course, not every state is this generous. On the other end of the spectrum, New Jersey, Illinois, and Connecticut landed at the bottom with the highest real-estate property taxes. Bills can be jaw-dropping: a median-value home would cost over $9,500 a year in New Jersey, about $5,200 in Illinois, and around $6,600 in Connecticut in annual property taxes alone. Suddenly, that dream house starts to look a little less dreamy—at least until you factor in other perks, like location, schools, or access to city life.

Whether you’re chasing sandy beaches, quiet suburbs, or bustling cities, real-estate property taxes can make a surprisingly big difference in what you actually pay to call a place home. And if you think that’s all the tax fun for homeowners, just wait: vehicle property taxes add another layer to the story.

Beyond the Sticker Price

The cost of a car keeps going long after you leave the dealership. Some states subtly tack on annual property taxes that can make even a modest sedan feel more expensive. About half of U.S. states charge vehicle property taxes, while the rest, including Hawaii, Oklahoma, and 22 other states plus D.C., don’t tax cars at all. To compare apples to apples, WalletHub assumed everyone drives the 2025 Toyota Camry LE, valued at $29,100.

Some states are surprisingly generous. In much of the Southwest, including Utah and New Mexico, your Camry won’t cost a cent extra in annual taxes. But not every desert neighbor is this easy on drivers: Nevada (2.12%) and Colorado (1.79%) rank among the most heavily taxed vehicles in the region.

At the national extreme, Virginia tops the list with the highest vehicle tax rate at 3.97%, which works out to about $1,156 a year on a standard Camry. Other states rounding out the bottom five are Mississippi, Missouri, Maine, and South Carolina, where vehicle taxes can add an unwelcome surprise to your monthly budget.

Whether you’re cruising a new Camry or holding onto a beloved old sedan, vehicle property taxes can make a bigger difference than you might think, and some states are definitely more driver-friendly than others.

Red vs. Blue

Turns out, even property taxes have a party affiliation. WalletHub’s data shows a general trend: red states (conservative) tend to have slightly lower average property tax rankings than blue states (liberal). On average, red states rank 23.48, while blue states come in at 29.90—and remember, smaller numbers mean lower taxes.

That said, there are exceptions. Hawaii, a Democratic state, came out with the lowest property taxes for both homes and vehicles, proving that politics isn’t the only factor driving tax bills. Local rules, home values, and other quirks still make a big difference.

So while your state’s political leaning can give you a rough sense of what to expect, your actual property taxes depend on a mix of factors, meaning your wallet might have surprises in both red and blue states alike.