As property taxes increase in many parts of the United States, American retirees are searching for more affordable living options.
High property taxes are pushing them away from expensive states to places with lower costs, impacting where many baby boomers choose to settle down during their retirement years.
Why Property Taxes Matter to Retirees
Property taxes across the country have risen nearly 30% since before the pandemic, averaging about $250 per month according to real estate firm Redfin.
This increase is significant for retirees who often live on fixed incomes. Although the overall tax rate has slightly dropped, home prices have increased considerably, leading to higher overall taxes.
States with High and Low Taxes
Studies by John Burns Real Estate Consulting show that the regions with the highest property taxes in 2023 were mainly on the East Coast, specifically in New York, New Jersey, and Pennsylvania, where they can be around 2% of a home’s value or more. The Midwest also sees high rates, for example in Illinois.
In contrast, states like Nevada, Delaware, and Arizona enjoy some of the lowest property taxes, well under 0.5% of home values.
Migration Trends Among Retirees
Analysis of migration trends shows that states with lower property taxes are seeing more retirees move in. For instance, in Nevada, Delaware, and Arizona, more than 2.5% of the population aged 65 or older moved from another state in 2023.
This is a stark contrast to higher tax states like New York, New Jersey, and Illinois, where less than 1.1% of the elderly population did the same.
Retirees tend to move to states that are not too far from their original homes if possible. For example, many who move to Arizona come from California. Geography still plays a significant role in deciding where retirees choose to settle.
Why are Retirees Relocating?
The primary reason for moving seems to be housing-related costs, which include high property taxes. Retirees are often looking for places where their fixed income can stretch further without the burden of high housing expenses.
Warm climates continue to be popular, although shifts are seen with some moving slightly north due to rising insurance costs in states like Florida and Texas.
In summary, as property taxes increase, retirees are looking for affordable living options that allow them to maintain their standard of living without financial strain.
Lower property taxes are a strong attraction for baby boomers looking to relocate, impacting migration trends across the country.
Read more: Home Buying Budget in 2025: A Guide to Affordability and Mortgage Options
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