Rent vs Buy by State
Property tax is the quiet variable that swings the rent-vs-buy math from state to state. Compare real effective tax rates, appreciation and rent growth across all 50 states.
These are estimates using standard formulas (loan amortization and the common 28%/36% guideline). They are not financial or real-estate advice — confirm any number with a lender or broker.
How the numbers are calculated
The calculator totals the cash you would spend buying (down payment, about 3% closing costs, mortgage principal and interest, property tax, insurance, maintenance, and PMI) and subtracts the equity you build, then compares it to total rent minus what your down payment could have earned if invested. The break-even year is when buying pulls ahead of renting on your inputs.
General housing facts
Home prices and property-tax rates vary a lot by location. The mortgage payment is mostly principal and interest, but taxes, insurance, maintenance and PMI often add 20–40% on top. Local prices and taxes change year to year, so always get a formal quote from a lender and check current listings.
Worked examples
Example: a $350,000 home in a 0.3% tax state vs a 2.2% tax state
At 6.8% with 20% down, the monthly tax on a $350,000 home is about $88 where the effective rate is 0.3% (Hawaii) but about $643 where it is 2.2% (New Jersey). That $555 a month difference alone can flip a close rent-vs-buy decision toward renting in the high-tax state, all else equal.
Example: no-income-tax states are not automatically cheaper
Texas and Florida have no state income tax, which helps owners at tax time, but their property-tax rates (about 1.8% and 0.8%) and insurance costs partly offset that. The table below shows why you must weigh the whole monthly ownership bill, not just the income-tax line.
The 50-state property-tax comparison
Effective property-tax rates below are typical published statewide averages (Tax Foundation and state revenue departments) and are examples to plan with, not a bill. They ignore local overrides and exemptions. Use them as the tax input in the calculators above.
| State | Effective property tax | What it means for rent vs buy |
|---|---|---|
| Alabama | ~0.41% | Low tax; ownership cost leans on insurance and price. |
| Alaska | ~1.18% | High effective rate because home values are low, not because bills are huge. |
| Arizona | ~0.61% | Moderate; fast-growing Phoenix pushes prices up. |
| Arkansas | ~0.62% | Low tax helps owners. |
| California | ~0.74% | Prop 13 caps the effective rate despite high prices. |
| Colorado | ~0.55% | Low tax; strong price growth is the bigger factor. |
| Connecticut | ~1.96% | High tax; weighs on the buy side. |
| Delaware | ~0.43% | Low tax and no sales tax. |
| Florida | ~0.80% | Moderate tax, but hurricane insurance is the swing cost. |
| Georgia | ~0.83% | Moderate; Atlanta prices drive the math. |
| Hawaii | ~0.30% | Lowest effective rate, but prices are very high. |
| Idaho | ~0.69% | Moderate; recent price spikes matter more than tax. |
| Illinois | ~2.00% | Among the highest; strongly favors renting in many areas. |
| Indiana | ~0.85% | Moderate. |
| Iowa | ~1.53% | Above average tax. |
| Kansas | ~1.33% | Above average. |
| Kentucky | ~0.83% | Moderate. |
| Louisiana | ~0.55% | Low; insurance and flood risk matter. |
| Maine | ~1.09% | Above average. |
| Maryland | ~1.09% | Above average; near D.C. prices dominate. |
| Massachusetts | ~1.04% | Above average; high prices offset low tax. |
| Michigan | ~1.62% | High tax. |
| Minnesota | ~1.05% | Above average. |
| Mississippi | ~0.81% | Moderate; low prices help buyers. |
| Missouri | ~0.99% | Near average. |
| Montana | ~0.83% | Moderate. |
| Nebraska | ~1.68% | High tax. |
| Nevada | ~0.53% | Low tax, no income tax; prices are the driver. |
| New Hampshire | ~1.86% | No income tax but high property tax. |
| New Jersey | ~2.21% | Highest effective rate; strongly favors renting. |
| New Mexico | ~0.78% | Moderate. |
| New York | ~1.68% | High tax plus mansion tax on pricier homes. |
| North Carolina | ~0.78% | Moderate. |
| North Dakota | ~0.99% | Near average. |
| Ohio | ~1.48% | Above average. |
| Oklahoma | ~0.88% | Moderate; low prices help. |
| Oregon | ~0.90% | Moderate; no sales tax. |
| Pennsylvania | ~1.53% | Above average. |
| Rhode Island | ~1.41% | Above average. |
| South Carolina | ~0.55% | Low tax. |
| South Dakota | ~1.24% | No income tax, above-average property tax. |
| Tennessee | ~0.68% | No broad income tax, moderate property tax. |
| Texas | ~1.80% | No income tax but very high property tax. |
| Utah | ~0.55% | Low tax; fast price growth. |
| Vermont | ~1.76% | High tax. |
| Virginia | ~0.80% | Moderate. |
| Washington | ~0.88% | No income tax, moderate property tax. |
| West Virginia | ~0.59% | Low tax, low prices. |
| Wisconsin | ~1.68% | High tax. |
| Wyoming | ~0.61% | No income tax, low property tax. |
States with no income tax
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming have no broad state income tax. That helps cash flow, but several (Texas, New Hampshire) lean on higher property taxes instead, so ownership is not automatically cheaper.
States with high property tax
New Jersey (~2.2%), Illinois (~2.0%), New Hampshire (~1.9%), Connecticut (~1.96%) and Texas (~1.8%) carry the heaviest effective property-tax loads. High tax raises the monthly ownership cost and, all else equal, pushes the rent-vs-buy break-even further out.
What is the average home appreciation rate?
US home prices have historically risen about 3% to 4% a year on average (FHFA index), though any single city can swing far from that. The calculators default to 3%; raise it for hot markets and lower it for weak ones.
When this calculator does not apply
State averages hide local reality: a county or school district can tax very differently from its state average, and some states cap increases (California’s Proposition 13). Confirm the actual rate with the county assessor before deciding.
Data sources & last update
Tax rates and home prices are typical published values (Tax Foundation, FHFA, state revenue departments, Insurance Information Institute) and are examples updated for 2026. They are not a quote — confirm current figures with a lender or local assessor before acting. HomeMath runs entirely in your browser; nothing you type is uploaded.
Frequently asked questions
Which states have no income tax (and how does it affect rent vs buy)?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming have no broad state income tax. That helps owners’ cash flow, but several offset it with higher property tax, so weigh the full monthly ownership cost, not just the income-tax line.
Why is property tax so high in some states?
New Jersey (~2.2%), Illinois (~2.0%) and Texas (~1.8%) fund schools and local services heavily through property tax rather than income or sales tax. High tax raises the monthly ownership cost and pushes the rent-vs-buy break-even further out.
What is the average home appreciation rate?
Historically about 3% to 4% a year on average (FHFA), used as the default growth assumption. Any metro can differ sharply, so adjust the appreciation input to your local market.