See how low property taxes in Montana 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.

Montana by the numbers

- Effective real estate tax rate: 0.84%
- Annual taxes on $217.5k home: $1,818
- Montana's median home value: $230,600
- Annual taxes on Montana's median home: $1,928

The real estate taxes in Montana are some of the lowest in the nation, and there are a few different reasons for it. For starters, the property tax system was created to reduce the tax burden on homeowners. If an owner occupies the property, they pay taxes on a fraction of the property’s market value. Plus, the commercial and business property is also eligible for significant exemptions, which helps to further reduce the real estate taxes in the state of Montana.

There are counties in Montana that pay more, on average, for real estate taxes than other counties. That’s because the cities, counties, and school districts are what determine tax rates in the state, which causes the rates to vary, sometimes significantly, from one county or district to the next. Overall, though, the low real estate tax rate in the state of Montana has been a draw for new residents from more tax-heavy states who are looking to cut down on the costs of what they pay to own property.

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