Highest and Lowest Property Tax ZIP Codes in America

The United States has one of the most fragmented property tax systems in the developed world. With more than 19,000 local taxing jurisdictions — counties, municipalities, school districts, and special districts — the range of property tax burdens across ZIP codes is extraordinary. The homeowner paying the most in property taxes can be paying fifty or sixty times what the homeowner paying the least owes, even on comparable home values.

Understanding the extremes of this system — which ZIP codes consistently appear at the top and bottom of property tax rankings, and why — reveals important patterns about how local government is funded and what homebuyers are really comparing when they look at homes in different areas.

Highest Property Tax ZIP Codes: Where Are They?

The highest-tax ZIP codes in America cluster in a few distinct regions. By median annual property tax paid in dollar terms, the top ZIP codes are concentrated in:

• Northern New Jersey (Bergen, Morris, Essex, Somerset counties): Median annual taxes in the highest ZIP codes in these counties routinely exceed $15,000 per year. ZIP codes like those in Short Hills (07078), Alpine (07620), and Millburn regularly appear among the most expensive in the country. New Jersey's reliance on property taxes for school funding, combined with some of the highest home values in the country, drives these extreme bills.
• Connecticut shoreline and Fairfield County: Greenwich, Westport, Darien, and New Canaan ZIP codes see median annual taxes in the $10,000-$18,000 range. Connecticut's mill rates are among the highest in the nation, and Fairfield County's high home values amplify the dollar impact.
• Long Island, New York (Nassau and Suffolk counties): Great Neck, Garden City, and the Hamptons feature some of the highest dollar-amount tax bills in the nation. New York's school district fragmentation and the region's very high home values combine for bills frequently exceeding $15,000 per year in top ZIP codes.
• Chicago North Shore suburbs (Lake County, IL): ZIP codes in Lake Forest, Winnetka, and Wilmette consistently rank among the highest in Illinois and the nation. Illinois has both high rates and high home values in the northern Chicago suburbs.
• Texas suburban metros (Harris, Collin, Denton, Travis counties): Texas homeowners pay some of the highest effective rates in the nation. ZIP codes in affluent suburbs of Houston, Dallas, and Austin can see median annual taxes of $8,000-$12,000 even on homes that would cost far less than comparable properties in New Jersey.

Rate vs. Dollar Amount: Two Different Rankings

The highest-rate ZIP codes and the highest-dollar ZIP codes are not the same list — and this distinction matters enormously for understanding your actual tax burden.

New Jersey, Connecticut, New Hampshire, Illinois, and Vermont consistently have the highest effective property tax rates (taxes as a percentage of home value). These states fund a large share of local services — especially schools — through property taxes with minimal state income tax offsets (in the case of New Hampshire) or high overall tax burdens (in the case of New Jersey and Connecticut).

But the ZIP codes paying the most in actual dollar terms tend to be where high rates intersect with high home values: northern New Jersey, Fairfield County CT, Long Island, and the North Shore suburbs of Chicago. A very high rate applied to a $1.5 million home produces a much larger bill than the same rate applied to a $300,000 home.

Lowest Property Tax ZIP Codes: Where Are They?

At the other extreme, the lowest-tax ZIP codes in America are concentrated in states that rely less on property taxes for local government funding:

• Hawaii: Hawaii consistently has the lowest effective property tax rate of any state, typically around 0.28-0.30% of home value. The state government funds a larger share of public services (including schools) at the state level, reducing the need for local property taxes. However, Hawaii's extraordinary home values mean that even at 0.28%, the dollar amount on a median home can be $2,000 or more per year.
• Alabama: Alabama's effective rates are among the lowest in the nation, often below 0.40%. The state uses a fractional assessment system (homes are assessed at a fraction of market value) and property tax revenue is supplemented by sales taxes and other sources. Rural ZIP codes in Alabama's Black Belt region can have effective rates well under 0.30%.
• Louisiana: Louisiana's homestead exemption (which exempts the first $75,000 of home value for primary residences) and low assessment ratios produce some of the lowest dollar-amount bills in the nation for owner-occupied homes. Effective rates in many Louisiana ZIP codes fall below 0.40%.
• South Carolina: South Carolina's 4% assessment ratio for primary residences (versus 6% for investment properties and second homes) keeps owner-occupied tax bills low. Many ZIP codes in rural and small-town South Carolina see effective rates below 0.50%.
• Colorado: While Colorado has higher home values than Alabama or Louisiana, the Gallagher Amendment (since repealed but with lingering effects) and TABOR revenue limitations have kept property tax rates among the lowest in the nation. Many Colorado ZIP codes have effective rates in the 0.40-0.55% range.
• Rural Appalachian and Plains ZIP codes: In rural areas with very low home values, absolute dollar amounts can be minimal even at moderate rates. A ZIP code with a median home value of $60,000 and a 0.80% effective rate produces a median tax bill of just $480 per year.

Why Coastal Metros Dominate Both High-Rate and High-Dollar Lists

It might seem paradoxical that coastal metropolitan areas dominate the highest-tax lists while also being the most desirable (and expensive) places to live. This reflects a fundamental characteristic of how American local government is financed.

In high-cost coastal metros, local governments — particularly school districts — need to fund sophisticated, expensive public services to attract and retain residents who have high expectations (and who often have the means to move to private alternatives). The cost of public employee salaries, benefits, and infrastructure maintenance is higher in high-cost areas. School districts in northern New Jersey or coastal Connecticut spend $20,000-$25,000 per pupil per year compared to $7,000-$10,000 in lower-cost states.

Furthermore, high-cost states tend to have stronger public sector unions and more generous public employee pension systems. Property taxes often fund the debt service on pension obligations and post-retirement benefit costs, not just current operations. This structural dynamic means that high-cost metropolitan areas often face compounding pressure to increase property tax levies over time.

The Investment Property Perspective

For real estate investors, property tax rate is a critical factor in calculating cap rate and cash-on-cash return. A property generating $30,000 in gross annual rent in a ZIP code with $10,000 in annual property taxes has a very different income potential than the same property in a low-tax ZIP code.

High-tax states like New Jersey and Illinois can significantly compress investment returns, particularly for smaller landlords who cannot absorb the tax burden as easily as institutional investors. Many experienced investors use the effective tax rate as an early screening tool — if the property tax alone consumes more than 10-15% of estimated gross rent, the investment math becomes challenging.

Conversely, low-tax states like Alabama, Tennessee, and South Carolina have attracted significant real estate investment partly because of their favorable tax treatment. Lower property taxes allow investors to charge competitive rents while maintaining healthy margins.

Interpreting Rate vs. Dollar Amount for Homebuyers

When comparing ZIP codes, homebuyers should pay attention to both the effective rate and the absolute dollar amount — and understand what each tells them.

The effective tax rate (taxes as a percentage of home value) is the best metric for comparing the relative tax burden across different home values and markets. A 2.0% rate is expensive regardless of whether you are buying a $200,000 house or a $2 million house.

The absolute dollar amount matters for budgeting purposes: it tells you what your actual monthly escrow contribution will be, and whether the property will qualify for the mortgage amount you want (since lenders include PITI — principal, interest, taxes, and insurance — in their debt-to-income calculations).

A moderately high rate applied to a modest home value can produce a lower actual bill than a low rate on a very expensive home. A buyer choosing between a $600,000 home at 0.6% effective rate ($3,600/year) and a $350,000 home at 1.4% ($4,900/year) is paying more in absolute dollars for the cheaper home.

How to Use This Data Practically

PropertyTaxByZip provides median effective tax rates and median annual tax paid for nearly 30,000 ZIP codes across all 50 states. Here is how to use it effectively when comparing areas:

• Use the effective rate to identify whether a ZIP code is in a high-tax or low-tax environment relative to state and national medians.
• Use the median annual tax paid to understand the likely dollar amount you will owe on a home near the median price for that ZIP code.
• Compare multiple ZIP codes in your target area side by side. Large rate differences between neighboring ZIPs often signal school district boundary effects.
• Factor the annual tax into your monthly budget. Divide by 12 and add to your estimated mortgage principal and interest payment to get a fuller picture of monthly housing costs.
• Look at state and national context. A 1.2% effective rate is average nationally but well above average for Texas or California.

Data Source

All ZIP-level property tax data on PropertyTaxByZip comes from the U.S. Census Bureau, American Community Survey 2019-2023 5-Year Estimates at the ZCTA level. Effective rates are derived by dividing median property tax paid by median home value. Rankings reflect median values and may not capture the full distribution within a ZIP code. For full methodology, see our methodology page.