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The Most (and Least) Tax-Friendly Major Cities in America

Joel Anderson

Life in a major city can be pricey. The rent typically is more expensive than in some smaller communities, and so are basic costs of living such as food. There’s one additional driver to the cost of city living that can be overlooked: taxes.

It’s no secret that taxes can take a huge bit of your paycheck, no matter where you live. But depending on which city you choose to call home, your taxes can be significantly higher or lower, based on data collected by GOBankingRates. Use this list of the most (and least) tax-friendly cities so you can find a city where your paycheck will last longer.

This article originally appeared on GOBankingRates.com: The Most (and Least) Tax-Friendly Major Cities in America

Life in a major city can be pricey. The rent typically is more expensive than in some smaller communities, and so are basic costs of living such as food. There’s one additional driver to the cost of city living that can be overlooked: taxes.

It’s no secret that taxes can take a huge bit of your paycheck, no matter where you live. But depending on which city you choose to call home, your taxes can be significantly higher or lower, based on data collected by GOBankingRates. Use this list of the most (and least) tax-friendly cities so you can find a city where your paycheck will last longer.

Least Tax-Friendly Major Cities in America

Most of the least tax-friendly places have high property tax rates, with rates as high as 2.815 percent. These cities usually have local income taxes, too.

Overall, many of the least tax-friendly cities tend to be in the old Midwest and former industrial states, including Ohio, Michigan and Pennsylvania.

10. Portland, Ore.

  • State income tax rate: 9 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 1.125 percent

Oregon is one of the highest-taxed states when it comes to state income taxes, and it’s also one of the most expensive states to file taxes in, a separate GOBankingRates study found. And although property tax rates are on the lower end in Portland, the median home value in the city is high — $424,200 — so many residents get stuck with a hefty amount of property taxes owed.

9. Louisville, Ky.

  • State income tax rate: 5.8 percent
  • Local income tax rate: 2.2 percent
  • Average property tax rate: 0.941 percent

Louisville’s property tax rates are relatively modest, but its local and state income tax rates more than counterbalance that. Its local income tax rate is the sixth-highest overall, and its state income taxes are also higher than average.

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8. Omaha, Neb.

  • State income tax rate: 6.84 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 2.093 percent

Omaha’s local income taxes are nonexistent for median earners. Omaha wound up in the top 10 cities with the highest taxes, however, because it is one of the 11 cities with average property taxes over 2 percent. With the median home value in the city at $168,900, the average homeowner will pay $3,535 in property taxes.

7. Philadelphia

  • State income tax rate: 3.07 percent
  • Local income tax rate: 3.92 percent
  • Average property tax rate: 0.949 percent

The City of Brotherly Love has the highest local tax rate for residents at 3.92 percent, and the median household income is $39,759. Philadelphia residents do get a break when it comes to property taxes — with low median home values and a low property tax rate, the average resident pays $1,450 in property taxes, which is among the lowest on this ranking.

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6. Milwaukee

  • State income tax rate: 6.27 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 2.56 percent

Detroit, Cleveland and Milwaukee are three of the four cities with the lowest median household income and the highest average property taxes. With the median home value at $116,700, the average Milwaukee resident will pay $2,988 in property taxes. On the plus side, there is no local income tax.

5. Cleveland

  • State income tax rate: 2.97 percent
  • Local income tax rate: 2 percent
  • Average property tax rate: 2.269 percent

Cleveland has the lowest median household income of the 52 cities included in this study at $28,974. Higher taxes, though, didn’t prevent it from being the largest city in Ohio where your paycheck stretches the furthest, GOBankingRates reported.

4. Columbus, Ohio

  • State income tax rate: 3.46 percent
  • Local income tax rate: 2.63 percent
  • Average property tax rate: 2.029 percent

Average property taxes over 2 percent are higher than the norm, with only 11 of the 52 cities at or above that rate. Despite its tax burden, Columbus can be affordable for retirees — it’s the No. 8 city on the list of places where your retirement nest egg will stretch the furthest.

3. Baltimore

  • State income tax rate: 4.75 percent
  • Local income tax rate: 3.2 percent
  • Average property tax rate: 1.519 percent

Baltimore is among the least tax-friendly cities, due in no small part to the high local income tax rate of 3.2 percent. The city does have lower expenses overall, being one of the 20 best big cities for renters, based on another GOBankingRates study.

2. Detroit

  • State income tax rate: 4.25 percent
  • Local income tax rate: 2.4 percent
  • Average property tax rate: 2.815 percent

Detroit has the second-highest tax burden of the cities included here, which is hardly a burden its residents can afford: The city also has the second-lowest median household income at just $30,344. Despite the high taxes, though, Detroit is one of the cities where your paycheck goes the furthest.

1. New York

  • State income tax rate: 6.33 percent
  • Local income tax rate: 3.65 percent
  • Average property tax rate: 1.925 percent

It takes $99,667 to live comfortably in New York, found a separate GOBankingRates study, despite a median household income of just over $60,000. Having the heaviest tax burden of the 52 largest cities in America can’t help.

Most Tax-Friendly Major Cities

Not surprisingly, the best places to live for taxes are cities that can be found in states with no income tax: Las Vegas; Nashville and Memphis in Tennessee, which only taxes dividends and interest; Seattle; and Jacksonville, Tampa and Miami in Florida. States like Colorado and Louisiana also provide some of the best tax places via their 3 to 4 percent income tax rates and their less than 1 percent effective property tax rates.

10. Denver

  • State income tax rate: 4.63 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 0.704 percent

The Mile High City is one of the places with the lowest taxes, with the fourth-lowest average property tax rate in the study. And having no local income taxes helps keep the tax burden on residents down. Denver also has the 10th-highest median income at $65,224.

9. New Orleans

  • State income tax rate: 4 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 0.74 percent

New Orleans is among the poorest cities in America, with a median income of $36,999, but its residents avoid a heavy tax burden at least. With a median home value of $179,800, the average homeowner in the Big Easy pays just $1,331 in property taxes — the fourth-lowest amount of all the cities included in this study.

8. Colorado Springs, Colo.

  • State income tax rate: 4.63 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 0.524 percent

Colorado Springs is one of the most tax-friendly cities, with the lowest average property tax rate on the list at just over a half-percent. With the median home value at $280,200, the average resident will pay $1,468 in property taxes.

7. Memphis, Tenn.

  • State income tax rate: 0 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 1.513 percent

Although the average property tax rate is 1.513 percent, Memphis has the lowest median home price of the cities examined at $83,400 — which means the average property tax bill is $1,262, one of the lowest amounts in this study. Residents also benefit from having no state or local income taxes.

6. Miami

  • State income tax rate: 0 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 1.28 percent

With a median home value of $333,600 in Miami, the average annual property tax amounts to $4,270. That’s among the highest in this ranking — which could be why Miami is one of the worst places to live if you’re trying to save money — but having no income taxes helps ease the burden of property taxes.

5. Tampa, Fla.

  • State income tax rate: 0 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 1.152 percent

All of the top seven cities with the lowest taxes in the U.S., including Tampa, get there by featuring no state or local income taxes for a typical resident. And with its warm weather and relatively low cost of living, Tampa is the best city for retirement in the income tax-free state of Florida, a separate GOBankingRates study found.

4. Jacksonville, Fla.

  • State income tax rate: 0 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 1.047 percent

The three Florida cities rank in succession, and they’re all inside the top 10 as the fourth-, fifth- and sixth-best cities for taxes in the U.S. Jacksonville beats out Miami and Tampa for top places with low taxes because its property tax rate is lower. With median home values in the city at $169,000, the average homeowner in Jacksonville pays $1,769 in property taxes.

3. Seattle

  • State income tax rate: 0 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 1.025 percent

Seattle has the third-highest median household income of major American cities, which might be important, as it’s also one of the 20 cities where home prices are skyrocketing, according to another GOBankingRates study. In fact, prices rose 17.1 percent between March 2017 and March 2018.

2. Nashville, Tenn.

  • State income tax rate: 0 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 1 percent

The median income in Nashville is $57,737, which is slightly above the national average, and residents can keep a big percentage of their paychecks thanks to a lack of state and local income taxes.

Property taxes are relatively low as well at just 1 percent, which would amount to $2,593 for the average Nashville homeowner.

1. Las Vegas

  • State income tax rate: 0 percent
  • Local income tax rate: 0 percent
  • Average property tax rate: 0.966 percent

Residents of Sin City are shelling out the least in taxes of any of the cities studied by GOBankingRates. And it’s located in one of the most tax-friendly states for retirees, according to a separate study.

Among the cities in states with no income taxes, Las Vegas has the lowest property tax rate at under 1 percent. With the median home value at $269,400, the average Las Vegas homeowner will pay $2,602 in property taxes.

Click through to read about the most and least tax-friendly countries.

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Gabrielle Olya contributed to the reporting for this article.

Methodology: The study reviewed the effective tax rates for residents in the 52 largest cities in America, scoring them on (1) state and local income tax rates for the median household income in that city and (2) average effective property tax, before combining those scores to reveal which cities have tax structures that make it easier on residents, and which ones make the cost of urban living that much worse. Income tax rates were sourced from Tax Foundation and represent 2018 brackets. Average effective property tax rates were sourced from SmartAsset. City median incomes were sourced from the U.S. Census Bureau’s American Community Survey 2017.