Where Are Retirees Moving? The Best Low-Tax States for Retirees

Where you live matters in retirement

Why should retirees care about low-tax states? Right now, many Americans are facing financial challenges—but for retirees, it can be even more daunting. With little or no ability to earn additional income, you may be relying on Social Security, savings, and a pension to cover your expenses.

That’s why it’s important to stretch your financial resources as much as possible, and one key way to do that is by managing your tax burden.

“Sky-high property taxes in large metros like New York City, Philadelphia, and Chicago are driving retirees out and fueling an internal migration to places where owning a home won’t land you in the poorhouse,” said The New York Post in March 2025.

In this article (Skip to...)

• Why property taxes matter for retirees
• Top 10 low-tax states for retirees
• Tips for retirees considering a move
• The bottom line

Why property taxes matter for retirees

Property taxes can be especially problematic for retirees and those on fixed incomes. That’s because those taxes tend to be levied as a percentage of a home’s value.

And average sales prices of homes sold in the U.S. have risen relentlessly over the last decade. In the last quarter of 2024, that average was $510,300, according to the Federal Reserve Bank of St. Louis. A decade earlier, it was $369,400.

In some states, such as New York and Illinois, annual property taxes can be as high as 2% of the home’s value. And 2% of an average home’s value at the end of 2024 would be a five-figure sum — year after year. Those escalating costs are a lot to find when your income barely changes from year to year.

The bigger picture

Of course, it would be a mistake to use property taxes as your only financial criterion for moving from one state to another. There’s no point in chasing a low or zero rate for those if you end up paying more in state income taxes or healthcare costs.

State income taxes are easy to look up (link below), but the HealthAffairs journal acknowledges that there’s little research into variations in healthcare costs across America. But it reckons that, in 2019, “state-specific per person spending ranged from $7,250 to $14,500.” Those averages will, no doubt, have risen since 2019, but the variation may not have changed much.

Why such a wide range? Well, the same reasons other costs vary from state to state. The journal identifies incomes and consumer prices.

Before you move, make sure you’re currently paying the least you can. Property tax exemptions for seniors are fairly widely available, but not always promoted locally. So, check your state government’s website.

Top 10 low-tax states for retirees

Kiplinger’s list of the 10 most tax-friendly states for retirees was updated in October 2024. But don’t forget that states can change their tax rates anytime they please, so check for the latest figures. Here’s the list:

1. Mississippi

Median property tax is just $1,145. Flat 4.70% individual state income tax rate. Zero state inheritance taxes. But its sales tax, which is also is levied on groceries, runs at 7%.

2. Tennessee

Median property tax is under $1,400. No state income tax. No state estate or inheritance taxes. Sales tax is 7% but 4% for groceries.

3. Wyoming

Median property tax of $1,567. No state income tax. No state estate or inheritance taxes. Sales tax is 4%.

4. Nevada

Median property tax of $1,884 (0.44%). No state income tax. No state estate or inheritance taxes. Sales tax is 8.24% but is not levied on groceries or prescription medicines.

5. Florida

Median property tax of $2,386. No state income tax. No state estate or inheritance taxes. Florida’s gas taxes total 36.5 cents per gallon.

6. South Dakota

Median property tax of $2,496. No state income tax. No state estate or inheritance taxes. Still has a sales tax on groceries of 4.2%.

7. Iowa

Median property tax under $3,000. No state tax on traditional retirement benefits. Maximum rate on state income tax is 5.70%, due to fall to a flat 3.9% in 2026. State estate or inheritance taxes exist. Still has a sales tax on groceries of 4.2%.

8. Pennsylvania

Median property tax is just over $3,100. Flat state income tax at 3.07%. However, no tax on retirement benefits. Estate and inheritance taxes exist. Sales tax is 6%, which is higher in a couple of counties.

9. Alaska

Median property tax is $3,687. No state income tax. Possibility of free residents’ grant. No estate and inheritance taxes. Sales tax isn’t imposed by the state, but local ones can run to 7%, including on groceries.

10. Texas

Median property tax is $3,872, but some relief may be on its way. No state income tax. No estate and inheritance taxes. Sales taxes are high: 8.2%.

State income taxes are largely sourced from the Tax Foundation.

Other financial factors to consider

Before choosing a state to which to relocate, consider all the financial and other implications of your move. Low-tax states for retirees can make a huge difference to your lifestyle, but there’s more to life than avoiding taxes. So, look at:

• Cost of living — Housing, utilities, and everyday expenses.
• Healthcare access – Quality and affordability of medical care.
• State income tax and retirement taxation — How different states tax Social Security and pensions.
• State estate and inheritance taxes — Especially important if you have adult children you like.
• Community and Lifestyle — Availability of retirement communities, climate and recreation. Plus, the culture of your candidate state: Will you fit in?

Tips for retirees considering a move

Invest some time in researching all you can about the state you think you like most. In particular, make sure you have the latest and most accurate information about the various taxes it levies. Your best source is probably the state government’s website.

You may want this move to be your last one. So, make sure the home you buy is going to meet your needs well into the future. Think through whether you should downsize to a home that will be easy and inexpensive to manage and maintain for decades to come.

Try visiting each of the three states you have at the top of your shortlist. Yes, you can do a web search for, “Living in X,” but there’s nothing like being on the ground to compare your options.

Finally, consult a trusted financial advisor. He or she may identify long-term considerations we haven’t covered and you haven’t thought of.

Low-tax states for retirees: The bottom line

Retirees tend to be on fixed incomes. And that can make finding taxes in general — and property taxes in particular — a real challenge.

Moving to one of the low-tax states for retirees can transform your lifestyle, freeing up money for you to spend on things you enjoy and value. And some of those states can help you maximize the amount you can leave to your kids.

But take care when choosing the state you move to. For you to be happy, it must meet your needs and you must be able to fit in with its inhabitants and their culture. You don’t want to be relocating again in a couple of years.

So, research and plan your move to one of the low-tax states for retirees. And then research and plan some more.