- Property taxes in states like New York and New Jersey exceed 2%, making homeownership increasingly difficult for retirees.
- Retiree migration is rising, with states like Florida, Texas, and Nevada attracting the most newcomers.
- Myrtle Beach, South Carolina, experienced a 23.1% increase in its 65+ age group between 2020 and 2023.
- Nevada’s property tax rates are below 0.5%, and it has no state income tax, making it a top destination for retirees.
- The housing market in low-tax states is seeing increased demand, driving prices and senior-friendly developments.
The Burden of Rising Property Taxes
Property taxes constitute a significant portion of homeowners’ annual expenses, but their impact is felt most acutely by retirees who live on fixed incomes. Unlike working professionals, retirees do not experience salary increases that can help absorb rising costs, making even minor tax hikes financially straining.
Some states levy property taxes that exceed 2% of a home’s value annually, leading many seniors to reconsider their long-term housing plans. States with high property taxes often justify these rates with superior public services, but retirees who no longer have school-aged children may feel they are paying for services they no longer use.
Additionally, as property values appreciate, tax assessments may rise even in cases where tax rates remain unchanged. This creates an unpredictable financial burden for retirees, particularly in states with rapid real estate appreciation or reassessment policies that don’t account for income limitations.
High-Tax States Driving Relocation
Certain states have consistently ranked among the highest in property tax burdens, and they are some of the biggest contributors to retiree out-migration. The U.S. Census Bureau and John Burns Research & Consulting confirm that states like New York, New Jersey, Illinois, and Pennsylvania have property tax rates that exceed 2% of a home’s assessed value.
Even states outside of this range, such as Massachusetts and Connecticut, impose rates above 1.25%, making them less attractive to retirees looking to stretch their savings. In contrast, states in the South and West tend to have significantly lower property tax rates, leading to an influx of older homeowners searching for affordability.
Moreover, high-tax states tend to have other financial burdens, such as estate taxes, state income taxes, and costly homeowner association fees, making relocation even more appealing. With the cost of living increasing in urban centers, many retirees are looking to southern and mountain-west states that offer lower taxes while maintaining a desirable quality of life.
Migration Patterns: Where Are Retirees Moving?
Retirees are increasingly migrating to states that offer not just affordability, but also warm weather, quality healthcare, and tax incentives. Census data highlights that the top destinations for retiree migration have remained largely consistent over the past decade.
Top Retirement Destinations by Popularity:
- Florida – No state income tax, mild winters, access to beaches, and a strong retiree community.
- Texas – No state income tax, low property tax rates in certain areas, and a strong economy.
- Arizona – Warm weather, active retirement communities, and tax-friendliness.
- Nevada – No state income tax, low property taxes (under 0.5%), and affordable living in cities like Las Vegas.
- North Carolina & Tennessee – Low property tax rates, mild seasonal climates, and affordability.
Certain cities are experiencing explosive growth due to their appeal to retirees. Myrtle Beach, South Carolina, for instance, saw a 23.1% increase in its 65+ population between 2020 and 2023 as retirees moved in to take advantage of its lower cost of living (Realtor.com).
The Influence of Family on Retiree Relocations
Beyond financial incentives, an often-overlooked factor in retiree migration is proximity to family. Many retirees follow their children and grandchildren who relocate for job opportunities or lower living costs.
Chris Porter, Senior Vice President at John Burns Research & Consulting, has noted that retirees from states like Illinois and New York frequently move not solely for tax relief but because their adult children are leaving those states. As children move to places like Texas, Florida, and Tennessee for job opportunities, their parents often follow to maintain close family ties.
This leads to a ripple effect in migration trends, reinforcing the popularity of low-tax states. Over time, as an increasing number of working-age Americans relocate for economic reasons, retiree migration follows suit, reshaping both population demographics and regional housing markets.
How Retiree Migration Impacts Housing Markets
The exodus of retirees from high-tax states and the influx into low-tax states have profound consequences on the housing market.
In states like Florida and Texas, demand for housing has surged, driving up home prices, particularly in cities with high concentrations of retirees. Developers are responding by expanding active-adult communities, building senior-friendly housing, and increasing rental options for those still deciding on a permanent move.
Conversely, high-tax states face housing market stagnation. As retirees leave, home supply increases, potentially leading to longer listing times and declining market values in certain areas. This shift affects tax revenues and local economies in departure states, forcing lawmakers to reassess fiscal policies to retain both retirees and working-age residents.
Retirees who rent before buying may also contribute to rising rental market costs, particularly in retiree-heavy cities like Las Vegas, where demand has created increased competition for desirable housing options.
The Appeal of Low-Tax States Like Nevada
Among low-tax states, Nevada stands out for retirees who want to maximize their disposable income. The state boasts:
- A property tax rate of under 0.5%, far below the national average.
- No state income tax, allowing retirees to keep more of their pension and savings.
- Affordable cost of living, particularly in areas like Henderson and Summerlin in Las Vegas.
- Mild winters, making it a desirable location for retirees from colder climates.
Las Vegas, in particular, is one of the fastest-growing retirement destinations due to its affordability and numerous amenities tailored to retirees, including 55+ communities, healthcare facilities, and year-round recreational options.
Financial Benefits of Moving to a Low-Tax State
Retirees who choose to relocate to states like Nevada, Florida, or Texas can realize substantial financial benefits, including:
- Lower annual property tax payments, saving thousands of dollars over time.
- No state income tax, ensuring higher take-home income from retirement accounts or Social Security.
- Affordable healthcare options, as some lower-tax states also offer competitive insurance and healthcare services.
These savings allow retirees to allocate funds toward medical care, leisure travel, or supporting family members, enhancing their long-term financial security.
Challenges and Considerations Before Moving
Despite the appeal of tax-friendly states, retirees should carefully assess other factors before making a move:
- Healthcare Availability – Some states have fewer specialized medical facilities compared to metro areas in high-tax states.
- Climate Comfort – Warmer states can experience extreme summers, which may be difficult for some retirees.
- Cost of Moving & Resettling – Transitioning to a new state involves moving costs, legal fees, and adapting to a new community.
- Home Sale Process – Selling a home in a high-tax state can be challenging, and financial planning is crucial.
The Role of Real Estate Experts in Navigating These Trends
Retirees looking to relocate can greatly benefit from experienced real estate professionals who understand both the local market trends and tax advantages of their preferred state.
In Las Vegas, real estate agents like Steve Hawks specialize in helping retirees find homes that fit their financial and lifestyle needs. With extensive knowledge of senior-friendly communities, tax policies, and cost-effective properties, these professionals ensure a smooth transition for those looking to make Nevada their retirement destination.
Final Thoughts
The financial strain of rising property taxes is prompting more retirees to relocate to tax-friendly states where they can secure a better financial future. Migration patterns show a clear preference for states with low or no state income taxes, such as Florida, Texas, and Nevada, where retirees can stretch their savings.
While moving can provide significant financial benefits, retirees should consider factors like healthcare access, climate, and housing affordability before making the transition. Working with real estate experts like Steve Hawks ensures they make well-informed housing decisions, helping them secure the best opportunities for their golden years.
Citations
- U.S. Census Bureau. (2023). American Community Survey Property Tax Data.
- Realtor.com. (2023). Retiree Migration Trends and Senior Population Growth by Region.
- John Burns Research & Consulting. (2023). Property Tax Burdens and Retiree Outmigration Trends.