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 near your family or access to great restaurants, nightlife or outdoor activities. One piece of the retirement-planning puzzle that can easily be overlooked is taxes. Though you may not be paying income tax anymore, there are other taxes to consider that can deplete your nest egg way too quickly. So, it's important to know what your ideal retirement city's tax situation looks like.
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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, according to Zillow's December 2022 data, 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, despite many cities having a 0% tax rate, such as Jacksonville, Florida, Chicago, Illinois and Nashville, Tennessee, to name a few, these cities are considered among the least tax-friendly due to a high sales tax and annual property taxes.
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.
1. Jacksonville, Florida
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $311,325
Annual property tax estimate by county: $2,646.26
Property tax rate: 0.85%
Sales tax: 7.5%
2. Philadelphia, Pennsylvania
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $232,844
Annual property tax estimate by county: $2,118.88
Property tax rate: 0.91%
Sales tax: 8.00%
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3. Las Vegas, Nevada
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $444,189
Annual property tax estimate by county: $3,198.16
Property tax rate: 0.72%
Sales tax: 8.38%
4. Louisville, Kentucky
Annual retirement taxes: $289.00
Effective retirement tax rate: 0.41%
Home value: $232,664
Annual property tax estimate by county: $2,093.98
Property tax rate: 0.90%
Sales tax: 6.00%
5. Orlando, Florida
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $395,992
Annual property tax estimate by county: $3,722.32
Property tax rate: 0.94%
Sales tax: 6.50%
6. Tampa, Florida
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $421,471
Annual property tax estimate by county: $4,594.03
Property tax rate: 1.09%
Sales tax: 7.50%
7. Nashville, Tennessee
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $452,701
Annual property tax estimate by county: $4,345.93
Property tax rate: 0.96%
Sales tax: 9.25%
8. Memphis, Tennessee
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $152,239
Annual property tax estimate by county: $2,100.90
Property tax rate: 1.38%
Sales tax: 9.75%
9. Miami, Florida
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $599,543
Annual property tax estimate by county: $6,115.34
Property tax rate: 1.02%
Sales tax: 7.00%
10. Atlanta, Georgia
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $440,627
Annual property tax estimate by county: $4,758.77
Property tax rate: 1.08%
Sales tax: 8.90%
11. Chicago, Illinois
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $305,255
Annual property tax estimate by county: $4,212.52
Property tax rate: 1.38%
Sales tax: 10.25%
12. Mesa, Arizona
Annual retirement taxes: $962
Effective retirement tax rate: 1.35%
Home value: $432,970
Annual property tax estimate by county: $2,554.52
Property tax rate: 0.59%
Sales tax: 8.30%
13. Phoenix, Arizona
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $1,015,662
Annual property tax estimate by county: $8,937.83
Property tax rate: 0.59%
Sales tax: 8.60%
14. Seattle, Washington
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $1,015,662
Annual property tax estimate by county: $8,937.83
Property tax rate: 0.88%
Sales tax: 10.25%
15. El Paso, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $197,796
Annual property tax estimate by county: $4,133.94
Property tax rate: 2.09%
Sales tax: 7.25%
16. Columbus, Ohio
Annual retirement taxes: $362
Effective retirement tax rate: 0.51%
Home value: $252,668
Annual property tax estimate by county: $4,219.56
Property tax rate: 1.67%
Sales tax: 7.50%
17. New York City, New York
Annual retirement taxes: $1,047
Effective retirement tax rate: 1.47%
Home value: $758,315
Annual property tax estimate by county: $4,625.72
Property tax rate: 0.61%
Sales tax: 8.00%
18. Fresno, California
Annual retirement taxes: $1,319.00
Effective retirement tax rate: 1.86%
Home value: $377,825
Annual property tax estimate by county: $2,455.86
Property tax rate: 0.65%
Sales tax: 7.98%
19. Colorado Springs, Colorado
Annual retirement taxes: $1,506
Effective retirement tax rate: 2.12%
Home value: $485,078
Annual property tax estimate by county: $2,279.87
Property tax rate: 0.47%
Sales tax: 8.2%
20. Pittsburgh, Pennsylvania
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $230,500
Annual property tax estimate by county: $5,117.10
Property tax rate: 2.22%
Sales tax: 7%
21. Tucson, Arizona
Annual retirement taxes: $962.00
Effective retirement tax rate: 1.35%
Home value: $326,755
Annual property tax estimate by county: $3,507.06
Property tax rate: 1.07%
Sales tax: 8.70%
22. Sacramento, California
Annual retirement taxes: $1,319.00
Effective retirement tax rate: 1.86%
Home value: $504,323
Annual property tax estimate by county: $3,429.40
Property tax rate: 0.68%
Sales tax: 8.75%
23. Oklahoma City, Oklahoma
Annual retirement taxes: $1,338.00
Effective retirement tax rate: 1.88%
Home value: $195,437
Annual property tax estimate by county: $1,876.20
Property tax rate: 0.96%
Sales tax: 8.63%
24. San Antonio, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $295,096
Annual property tax estimate by county: $6,256.04
Property tax rate: 2.12%
Sales tax: 8.25%
25. Tulsa, Oklahoma
Annual retirement taxes: $1,338.00
Effective retirement tax rate: 1.88%
Home value: $188,917
Annual property tax estimate by county: $2,002.52
Property tax rate: 1.06%
Sales tax: 8.52%
26. Virginia Beach, Virginia
Annual retirement taxes: $1,588.00
Effective retirement tax rate: 2.24%
Home value: $382,310
Annual property tax estimate by county: $3,096.71
Property tax rate: 0.81%
Sales tax: 6.00%
27. Denver, Colorado
Annual retirement taxes: $1,506.00
Effective retirement tax rate: 2.12%
Home value: $671,689
Annual property tax estimate by county: $3,627.12
Property tax rate: 0.54%
Sales tax: 8.81%
28. Houston, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $271,255
Annual property tax estimate by county: $6,265.99
Property tax rate: 2.31%
Sales tax: 8.25%
29. Dallas, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $339,824
Annual property tax estimate by county: $7,408.16
Property tax rate: 2.18%
Sales tax: 8.25%
30. San Diego, California
Annual retirement taxes: $1,319.00
Effective retirement tax rate: 1.86%
Home value: $1,077,056
Annual property tax estimate by county: $6,570.04
Property tax rate: 0.61%
Sales tax: 7.75%
31. Indianapolis, Indiana
Annual retirement taxes: $1,540.00
Effective retirement tax rate: 2.17%
Home value: $225,000
Annual property tax estimate by county: $2,587.50
Property tax rate: 1.15%
Sales tax: 7.00%
32. Washington D.C.
Annual retirement taxes: $1,987.00
Effective retirement tax rate: 2.80%
Home value: $811,968
Annual property tax estimate by county: $3,735.05
Property tax rate: 0.46%
Sales tax: 6.00%
33. Baltimore, Maryland
Annual retirement taxes: $1,693.00
Effective retirement tax rate: 2.38%
Home value: $203,443
Annual property tax estimate by county: $2,339.59
Property tax rate: 1.15%
Sales tax: 6.00%
34. Long Beach, California
Annual retirement taxes: $1,319.00
Effective retirement tax rate: 1.86%
Home value: $874,519
Annual property tax estimate by county: $5,684.37
Property tax rate: 0.65%
Sales tax: 10.25%
35. Fort Worth, Texas
Annual retirement taxes: $0
Effective retirement tax rate: 0%
Home value: $319,398
Annual property tax estimate by county: $7,569.73
Property tax rate: 2.37%
Sales tax: 8.25%
36. Detroit, Michigan
Annual retirement taxes: $1,263.00
Effective retirement tax rate: 1.78%
Home value: $66,896
Annual property tax estimate by county: $1,384.75
Property tax rate: 2.07%
Sales tax: 6.00%
37. Los Angeles
Annual retirement taxes: $1,319.00
Effective retirement tax rate: 1.86%
Home value: $1,042,650
Annual property tax estimate by county: $6,777.23
Property tax rate: 0.65%
Sales tax: 9.50%
38. Raleigh, North Carolina
Annual retirement taxes: $1,832.00
Effective retirement tax rate: 2.58%
Home value: $448,289
Annual property tax estimate by county: $3,631.14
Property tax rate: 0.81%
Sales tax: 7.25%
39. Kansas City, Missouri
Annual retirement taxes: $1,481.00
Effective retirement tax rate: 2.08%
Home value: $226,047
Annual property tax estimate by county: $2,870.80
Property tax rate: 1.27%
Sales tax: 8.86%
40. Oakland, California
Annual retirement taxes: $1,319.00
Effective retirement tax rate: 1.86%
Home value: $1,058,849
Annual property tax estimate by county: $7,200.17
Property tax rate: 0.68%
Sales tax: 10.25%
41. San Francisco, California
Annual retirement taxes: $1,319.00
Effective retirement tax rate: 1.86%
Home value: $1,657,255
Annual property tax estimate by county: $9,114.90
Property tax rate: 0.55%
Sales tax: 8.63%
42. Charlotte, North Carolina
Annual retirement taxes: $1,832.00
Effective retirement tax rate: 2.58%
Home value: $396,954
Annual property tax estimate by county: $4,168.02
Property tax rate: 1.05%
Sales tax: 7.25%
43. Austin, Texas
Annual retirement taxes: 0
Effective retirement tax rate: 0%
Home value: $668,341
Annual property tax estimate by county: $13,233.15
Property tax rate: 1.98%
Sales tax: 8.25%
44. San Jose, California
Annual retirement taxes: $1,319.00
Effective retirement tax rate: 1.86%
Home value: $1,486,037
Annual property tax estimate by county: $9,956.45
Property tax rate: 0.67%
Sales tax: 9.38%
45. Boston, Massachusetts
Annual retirement taxes: $$2,037.00
Effective retirement tax rate: 2.87%
Home value: $753,428
Annual property tax estimate by county: $5,876.74
Property tax rate: 0.78%
Sales tax: 6.25%
46. Albuquerque, New Mexico
Annual retirement taxes: $2,548
Effective retirement tax rate: 3.59%
Home value: $310,969
Annual property tax estimate by county: $2,518.85
Property tax rate: 0.81%
Sales tax: 7.75%
47. Buffalo, New York
Annual retirement taxes: $1,047.00
Effective retirement tax rate: 1.47%
Home value: $207,184
Annual property tax estimate by county: $5,490.38
Property tax rate: 2.65%
Sales tax: 8.75%
48. Milwaukee, Wisconsin
Annual retirement taxes: $1,955.00
Effective retirement tax rate: 2.75%
Home value: $178,704
Annual property tax estimate by county: $4,002.97
Property tax rate: 2.24%
Sales tax: 5.50%
49. Portland, Oregon
Annual retirement taxes: $3,212.
Effective retirement tax rate: 4.52%
Home value: $593,438
Annual property tax estimate by county: $5,875.04
Property tax rate: 0.99%
Sales tax: 0%
50. Omaha, Nebraska
Annual retirement taxes: $3,146.00
Effective retirement tax rate: 4.43%
Home value: $266,993
Annual property tax estimate by county: $5,259.76
Property tax rate: 1.97%
Sales tax: 7.00%
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Erica Corbin contributed to the reporting for this article.Methodology: GOBankingRates looked at the 50 biggest cities in the U.S. by housing market according to Zillow's December 2022 data and ranked them to determine the most and least tax-friendly cities for retirees. Each city was scored on: (1) its estimated total amount paid in retirement taxes anually. This figure was calculated by state, assuming a single-filer turning 65 in 2022, receiving the national average annual amount in retirement benefits (sourced from the Social Security Administration's December 2022 Monthly Statistical Snapshot) and collecting the majority of their income from a retirement account (assuming retirement benefits account for 30% 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 2022 median home value for each city (as sourced from Zillow's December 2022 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 5 factors, with sales tax weighted at 0.5x the other factors.
This article originally appeared on GOBankingRates.com: The Most and Least Tax-Friendly Cities for Retirees
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