These ‘Deep Blue’ States Offer a Surprisingly Good Deal on Property Taxes

In recent years, America has become ever more deeply divided into two separate political camps: “blue” for liberal and “red” for conservative.

Even individual states are now characterized by one of those two colors. For example, it is assumed that in “blue” states, citizens are highly taxed so the government can provide more services.

Meanwhile, in “red” states, it is believed that citizens pay less in taxes and are expected to live with fewer services.

While there is some truth to those characterizations, the picture is actually more nuanced.

Take property taxes. At least four places that just about everyone identifies as “blue” actually have relatively low property taxes. All of these states finish near the top of the list for the lowest property taxes in the nation.

In fact, property taxes are lower in these places than in deeply “red” states such as Florida and Texas.

Following are three “deep blue” states (and one district) that offer a surprisingly good deal on property taxes, according to Rocket Mortgage.

Hawaii

Real estate tax rate: 0.28%

Ranking among U.S. states: No. 1

Hawaii is a famously expensive place to live. Groceries and other items here can come with shocking sticker prices, and income taxes are among the highest in the country.

And yet, property taxes are a bargain in paradise. In fact, Hawaii has the nation’s lowest property tax rate.

Hawaii keeps property taxes low by granting generous exemptions — in some cases well over $100,000 — for owner-occupied residences.

District of Columbia

Real estate tax rate: 0.56%

Ranking among U.S. states: No. 5

How blue is the District of Columbia? Although not technically a state, voters here began casting ballots for president in 1964. Since that time, D.C. has never gone for the Republican Party candidate.

But property taxes are unusually low for a place so closely tied to the Democratic Party.

The District of Columbia has several provisions that keep a lid on property taxes, including a homestead deduction and an assessment cap limiting the annual increase in taxable liability to 10%.

Delaware

Real estate tax rate: 0.57%

Ranking among U.S. states: No. 7

A little more than half of people — 55% — in Delaware either call themselves Democrats or lean that direction. Just 29% claim they are Republicans or lean that way.

But property taxes and income taxes are relatively low in the state, and there is no sales tax.

One reason for low property taxes here is that Delaware reportedly bases its property tax rate on assessments made long ago. Officials do not regularly assess properties to set new rates.

California

Real estate tax rate: 0.76%

Ranking among U.S. states: No. 16

Few places are more closely tied to the Democratic Party — or progressive ideals — than California. Income taxes here are notoriously high for those with large incomes.

Yet, property taxes are low. Golden State homeowners can thank Proposition 13, approved by the state’s voters in 1978, which does two things to keep property taxes low:

• Limits general property taxes to 1% of a property’s market value
• Limits any increases in assessed value to 2% per year

Unhappy with your property tax rate? It might be more negotiable than you think. A few years back, Money Talks News founder Stacy Johnson offered some tips for lowering your bill in “How Can I Fight My Property Taxes?”