The Most and Least Tax-Friendly Cities for Retirees
When considering the perfect spot to spend your golden years, you’ll likely take many factors into account: cost of living, weather, proximity to loved ones and maybe even your ability to pursue hobbies that are important to you. Nothing says comfortable retirement quite like living next door to your favorite golf course or fishing hole, after all. But one piece of the retirement-planning puzzle that can easily be overlooked is taxes. Though it might seem less important than the aforementioned factors, a high tax rate will deplete your nest egg faster than you can say, “But my favorite golf course is in Minneapolis!” So, it’s important to know what your ideal retirement city’s tax situation looks like.
In order to determine the most and least tax-friendly cities for retirees, GOBankingRates examined the 50 biggest U.S. cities in terms of population size and scored them across five factors: estimated total taxes paid annually in retirement, the effective retirement tax rate in the state, the amount paid in property taxes annually, the estimated property tax rate and sales tax. Though many of the most tax-friendly cities owe their spot on the list to a 0% tax rate, a lack of retirement taxes didn’t necessarily make a city “tax-friendly.” For example, Austin, Texas, despite its 0% tax rate, wound up as one of the least tax-friendly cities due to a high sales tax and annual property taxes more than three times the U.S. average.
Whether your retirement is years down the road or just around the corner, it’s important to know how taxes will affect your outlook. Starting with the most tax-friendly cities for retirees, learn the best and worst places to retire when it comes to taxes.
Last updated: July 21, 2020
1. Louisville, Kentucky
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $165,500
Annual property tax estimate by county: $1,489.50
Property tax rate: 0.90%
Sales tax: 6.00%
2. Jacksonville, Florida
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $180,600
Annual property tax estimate by county: $1,535.10
Property tax rate: 0.85%
Sales tax: 7.00%
3. Las Vegas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $274,400
Annual property tax estimate by county: $1,975.68
Property tax rate: 0.72%
Sales tax: 8.25%
4. Atlanta
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $264,500
Annual property tax estimate by county: $2,089.55
Property tax rate: 0.79%
Sales tax: 8.90%
Learn Why: A Tiny Tax Refund Could Be the Best Thing To Happen To Your Finances
5. Nashville, Tennessee
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $267,000
Annual property tax estimate by county: $2,563.20
Property tax rate: 0.96%
Sales tax: 9.25%
6. Memphis, Tennessee
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $89,100
Annual property tax estimate by county: $1,229.58
Property tax rate: 1.38%
Sales tax: 9.25%
7. Tampa, Florida
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $224,900
Annual property tax estimate by county: $2,451.41
Property tax rate: 1.09%
Sales tax: 8.50%
8. Miami
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $337,900
Annual property tax estimate by county: $3,446.58
Property tax rate: 1.02%
Sales tax: 7.00%
Related: Understand How You Can Prepare for Rising Gas Prices and Taxes
9. New Orleans
Annual retirement taxes: $515
Effective retirement tax rate: 0.99%
Home value: $179,700
Annual property tax estimate by county: $1,096.17
Property tax rate: 0.61%
Sales tax: 9.45%
10. Fresno, California
Annual retirement taxes: $715
Effective retirement tax rate: 1.37%
Home value: $246,000
Annual property tax estimate by county: $1,599
Property tax rate: 0.65%
Sales tax: 7.98%
11. Mesa, Arizona
Annual retirement taxes: $763
Effective retirement tax rate: 1.47%
Home value: $257,100
Annual property tax estimate by county: $1,516.89
Property tax rate: 0.59%
Sales tax: 8.30%
12. Phoenix
Annual retirement taxes: $763
Effective retirement tax rate: 1.47%
Home value: $248,100
Annual property tax estimate by county: $1,463.79
Property tax rate: 0.59%
Sales tax: 8.60%
13. Philadelphia
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $162,600
Annual property tax estimate by county: $2,715.42
Property tax rate: 1.67%
Sales tax: 8.00%
14. Chicago
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $229,600
Annual property tax estimate by county: $3,168.48
Property tax rate: 1.38%
Sales tax: 10.25%
15. New York
Annual retirement taxes: $268
Effective retirement tax rate: 0.52%
Home value: $668,500
Annual property tax estimate by county: $4,746.35
Property tax rate: 0.71%
Sales tax: 8.00%
16. Sacramento, California
Annual retirement taxes: $715
Effective retirement tax rate: 1.37%
Home value: $332,600
Annual property tax estimate by county: $2,261.68
Property tax rate: 0.68%
Sales tax: 8.75%
17. Tucson, Arizona
Annual retirement taxes: $763
Effective retirement tax rate: 1.47%
Home value: $196,300
Annual property tax estimate by county: $1,590.03
Property tax rate: 0.81%
Sales tax: 8.70%
2020 IRS Tax Brackets: How Much You’ll Pay in 2020 on What You Earned in 2019
18. Virginia Beach, Virginia
Annual retirement taxes: $822
Effective retirement tax rate: 1.58%
Home value: $271,900
Annual property tax estimate by county: $2,202.39
Property tax rate: 0.81%
Sales tax: 6.00%
19. Columbus, Ohio
Annual retirement taxes: $370
Effective retirement tax rate: 0.71%
Home value: $159,700
Annual property tax estimate by county: $2,363.56
Property tax rate: 1.48%
Sales tax: 7.50%
20. El Paso, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $130,000
Annual property tax estimate by county: $2,717.00
Property tax rate: 2.09%
Sales tax: 7.25%
21. Seattle
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $718,500
Annual property tax estimate by county: $6,322.80
Property tax rate: 0.88%
Sales tax: 10.10%
22. Tulsa, Oklahoma
Annual retirement taxes: $1,176
Effective retirement tax rate: 2.26%
Home value: $123,000
Annual property tax estimate by county: $799.50
Property tax rate: 0.65%
Sales tax: 8.52%
23. San Diego
Annual retirement taxes: $715
Effective retirement tax rate: 1.37%
Home value: $640,900
Annual property tax estimate by county: $3,909.49
Property tax rate: 0.61%
Sales tax: 7.75%
24. Baltimore
Annual retirement taxes: $1,353
Effective retirement tax rate: 2.60%
Home value: $120,900
Annual property tax estimate by county: $797.94
Property tax rate: 0.66%
Sales tax: 6.00%
25. Long Beach, California
Annual retirement taxes: $715
Effective retirement tax rate: 1.37%
Home value: $606,200
Annual property tax estimate by county: $3,576.58
Property tax rate: 0.59%
Sales tax: 10.25%
26. Washington
Annual retirement taxes: $1,236
Effective retirement tax rate: 2.38%
Home value: $575,600
Annual property tax estimate by county: $2,647.76
Property tax rate: 0.46%
Sales tax: 6.00%
27. Los Angeles
Annual retirement taxes: $715
Effective retirement tax rate: 1.37%
Home value: $698,800
Annual property tax estimate by county: $4,122.92
Property tax rate: 0.59%
Sales tax: 9.50%
28. San Antonio
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $178,500
Annual property tax estimate by county: $3,784.20
Property tax rate: 2.12%
Sales tax: 8.25%
Discover: The 50 Cheapest Countries To Retire To
29. Kansas City, Missouri
Annual retirement taxes: $869
Effective retirement tax rate: 1.67%
Home value: $149,500
Annual property tax estimate by county: $1,808.95
Property tax rate: 1.21%
Sales tax: 8.61%
30. Indianapolis
Annual retirement taxes: $1,093
Effective retirement tax rate: 2.10%
Home value: $147,600
Annual property tax estimate by county: $1,594.08
Property tax rate: 1.08%
Sales tax: 7.00%
31. Oklahoma City
Annual retirement taxes: $1,176
Effective retirement tax rate: 2.26%
Home value: $135,100
Annual property tax estimate by county: $1,310.47
Property tax rate: 0.97%
Sales tax: 8.63%
32. Colorado Springs, Colorado
Annual retirement taxes: $1,483
Effective retirement tax rate: 2.85%
Home value: $302,900
Annual property tax estimate by county: $1,423.63
Property tax rate: 0.47%
Sales tax: 8.25%
33. Oakland, California
Annual retirement taxes: $715
Effective retirement tax rate: 1.37%
Home value: $737,700
Annual property tax estimate by county: $5,016.36
Property tax rate: 0.68%
Sales tax: 9.25%
34. Dallas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $212,700
Annual property tax estimate by county: $4,658.13
Property tax rate: 2.19%
Sales tax: 8.25%
35. Fort Worth, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $200,100
Annual property tax estimate by county: $4,742.37
Property tax rate: 2.37%
Sales tax: 8.25%
Read More: You Don’t Have To Be a Millionaire To Retire In These Places
36. Wichita, Kansas
Annual retirement taxes: $1,220
Effective retirement tax rate: 2.34%
Home value: $129,300
Annual property tax estimate by county: $1,616.25
Property tax rate: 1.25%
Sales tax: 7.50%
37. Denver
Annual retirement taxes: $1,483
Effective retirement tax rate: 2.85%
Home value: $426,200
Annual property tax estimate by county: $2,301.48
Property tax rate: 0.54%
Sales tax: 8.31%
38. Arlington, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $213,000
Annual property tax estimate by county: $5,048.10
Property tax rate: 2.37%
Sales tax: 8.00%
39. Houston
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $190,400
Annual property tax estimate by county: $4,721.92
Property tax rate: 2.48%
Sales tax: 8.25%
40. Raleigh, North Carolina
Annual retirement taxes: $1,426
Effective retirement tax rate: 2.74%
Home value: $281,800
Annual property tax estimate by county: $2,282.58
Property tax rate: 0.81%
Sales tax: 7.25%
41. San Jose, California
Annual retirement taxes: $715
Effective retirement tax rate: 1.37%
Home value: $989,000
Annual property tax estimate by county: $6,626.30
Property tax rate: 0.67%
Sales tax: 9.25%
42. San Francisco
Annual retirement taxes: $715
Effective retirement tax rate: 1.37%
Home value: $1,352,300
Annual property tax estimate by county: $7,437.65
Property tax rate: 0.55%
Sales tax: 8.50%
43. Albuquerque, New Mexico
Annual retirement taxes: $1,623
Effective retirement tax rate: 3.12%
Home value: $205,000
Annual property tax estimate by county: $1,660.50
Property tax rate: 0.81%
Sales tax: 7.88%
44. Charlotte, North Carolina
Annual retirement taxes: $1,426
Effective retirement tax rate: 2.74%
Home value: $232,500
Annual property tax estimate by county: $2,441.25
Property tax rate: 1.05%
Sales tax: 7.25%
See: Here’s Exactly How Much You Need Saved for Retirement in Your State
45. Austin, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $384,600
Annual property tax estimate by county: $7,576.62
Property tax rate: 1.97%
Sales tax: 8.25%
46. Boston
Annual retirement taxes: $1,549
Effective retirement tax rate: 2.98%
Home value: $596,700
Annual property tax estimate by county: $4,654.26
Property tax rate: 0.78%
Sales tax: 6.25%
47. Milwaukee
Annual retirement taxes: $1,326
Effective retirement tax rate: 2.55%
Home value: $124,100
Annual property tax estimate by county: $2,779.84
Property tax rate: 2.24%
Sales tax: 5.60%
48. Portland, Oregon
Annual retirement taxes: $2,306
Effective retirement tax rate: 4.43%
Home value: $420,400
Annual property tax estimate by county: $3,573.40
Property tax rate: 0.85%
Sales tax: 0%
49. Minneapolis
Annual retirement taxes: $2,127
Effective retirement tax rate: 4.09%
Home value: $268,100
Annual property tax estimate by county: $2,707.81
Property tax rate: 1.01%
Sales tax: 8.03%
50. Omaha, Nebraska
Annual retirement taxes: $1,871
Effective retirement tax rate: 3.60%
Home value: $179,000
Annual property tax estimate by county: $3,526.30
Property tax rate: 1.97%
Sales tax: 7.00%
More From GOBankingRates
To determine the most and least tax-friendly cities for retirees, GOBankingRates looked at the 50 biggest cities in the U.S. by population according to the U.S. Census Bureau’s 2018 Population Estimates and scored them on the following factors: (1) estimated total amount paid in retirement taxes annually (this figure was calculated by state through SmartAsset‘s Retirement Tax Friendliness calculator, assuming a single filer turning 65 in 2020, receiving the national average annual amount in retirement benefits, sourced from the Social Security Administration’s November 2019 Monthly Statistical Snapshot, and collecting the majority of their income from a retirement account — assuming retirement benefits account for 33% of total income, as estimated by the SSA Fact Sheet); (2) the effective retirement tax rate in each state, calculated as the percentage of total income paid in retirement taxes; (3) the average amount paid in property taxes annually, calculated by using Tax-Rates.org‘s Property Tax Calculator to apply the appropriate county, parish or district’s tax rates to the estimated median home value for each city, as sourced from Zillow’s October 2019 Housing Data; (4) the estimated property tax rate in its county, parish or district from Tax-Rates.org; and (5) the sales tax rate in each city, according to Avalara. All 50 cities were then ranked according to their scores on the above five factors, with sales tax weighted at 1/2 times the other factors. Note: Detroit was excluded due to a lack of data. All data used to conduct this study was compiled and verified on Dec. 16, 2019, and is subject to change.
This article originally appeared on GOBankingRates.com: The Most and Least Tax-Friendly Cities for Retirees