Looking for Gorgeous Area in Income Tax Free State

[javeline86]

We hope to retire in the next couple of years. We've done well for ourselves financially, well enough that we are looking to retire in an income tax-free state. Having lived in NYC for many years we look forward to saying forever goodbye to high state and local income taxes.

Our hope is to find a beautiful spot in one of these no income tax states where we can purchase a home on perhaps 20 or more acres in an area that has National Park like beauty, but at the same time is within an hour's drive to a decent-sized city. We've thought about Jackson Hole, WY and the Nevada side of Lake Tahoe, but the cost of a 20+ acre spread in either location is probably somewhat beyond us. We've also looked in the Ft Davis area of Texas, but it's a bit too isolated.

We love both desert and mountain locations and would appreciate some suggestions for towns in Nevada, Texas, Washington State and Wyoming. The few other income taxless states don't appeal to us all that much. Thanks.

 

[38Chevy454]

You really have to look a total tax picture. Many no-income tax states have higher prop taxes, higher sales tax, and other forms of getting your money from you. Not denying that state income tax can be a big factor in the overall equation, but it is not the only factor.


My suggestion is to look at places you want to live, then evaluate the total tax picture as one of your decision variables. I know this does not directly answer your question, but you can only determine what works best for you.

 

[Dreaming of Freedom]

I agree that you need to look at the whole tax picture including property & sales taxes.

 

[Finder]

I agree that you need to look at the whole tax picture including property & sales taxes.

+1

 

[shortstop14]

We've been looking at Port Angeles or Sequim up on the Olympic Peninsula in Washington. Close to Olympic National Park, and not too far (but more than an hour) from Seattle. A bit of a rain shadow from the Olympics there, so not quite as much rain as the rest of western Washington. But I've got no idea about the cost of larger acreage and the property tax required on that.

Also Stevenson or White Salmon out in the Columbia Gorge might fit the requirements. Coeur d'Alene, Idaho is also interesting, but I'd have to assess the tax difference - it would be hard to give up the lack of income tax in Washington, even if overall taxation might be less.

 

[nwsteve]

Check out Eastern Wa especially Greater Spokane, second largest city in WA. This is a semi arid area but also borders on an incredible fresh water lake (Coeur
de aLene). Property values much lower than greater Puget Sound (Seattle-Tacoma) as is overall cost of living. We lived near Seattle for 25+yrs and moved 9 years ago to a university town 75 South of Spokane. Love it
Nwsteve

 

[javeline86]

I agree that you need to look at the whole tax picture including property & sales taxes.

I'm quite sure our income tax in a state with even a 5% levy will be over $15K a year so I believe that will eclipse real estate taxes by quite a bit which is why we have the strong preference for income tax free.

 

[packrat44]

I'm quite sure our income tax in a state with even a 5% levy will be over $15K a year so I believe that will eclipse real estate taxes by quite a bit which is why we have the strong preference for income tax free.

I have lived in Eastern Washington state most of my live and enjoy it. We have about 2 acres with 250' of waterfront. Property tax for land, house, garage (1,150sf), and shop (4,000sf) is about $3,600/yr.

One negative is - Washington has an estate tax which kicks in at a relatively low $2M/person.

 

[daylatedollarshort]

We've been looking at Port Angeles or Sequim up on the Olympic Peninsula in Washington. Close to Olympic National Park, and not too far (but more than an hour) from Seattle. A bit of a rain shadow from the Olympics there, so not quite as much rain as the rest of western Washington.

I've been on vacation there a couple of times. It is a beautiful area.

 

[gcgang]

You might try NE WY, Sheridan or some place in the Bighorn Basin (Cody, Powell). Not " chic" like Jackson Hole, but much more affordable. The "big" city nearby is Billings, Mt (100,000 pop), about an hour away.


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[bUU]

One other aspect to consider, in looking at the tax big picture, is how certain states maintain specific tax benefits specifically for older folks, retirees, etc. Here in Georgia, folks over 65 gain significant property tax advantages, along with advantages related to otherwise-taxable distributions from tax advantaged retirement accounts. While we have a higher basic income tax rate than Massachusetts, these advantages make Georgia a relatively advantageous state to which to retire, from a tax standpoint.

We haven't even bothered to consider anything west of the Mississippi, for a variety of reasons, such as family proximity, and affinity for the east coast's brand of natural beauty over that of the west's. We're not the type to live in the "wilderness" ourselves, but we want to be able to visit it on day trips. So these dyed-in-the-wool suburbanites appreciate having the Chattahoochee National Forest and the Great Smokey Mountains National Park nearby. The former owners of our townhouse moved from here to northern Georgia where they built something close to what I suspect you're looking for. I think they are closer to two hours from center city Atlanta rather than just one hour. But there are many properties in Cleveland, Blue Ridge, Suches, and other localities within and around the national forest.

 

[Cedar]

Retire in Sheridan, WY

Retire in Sheridan, WY. If you like Jackson, WY then you should love Sheridan, WY. Great place to live and retire. Big Horn Mountains is the best you can find easy access. Fishing, Hunting and no state income tax.

 

[Mulligan]

Like others said you have to factor it all in and know every variable. A good friend of mine moved across state lines to Illinois and was bragging about how his pension was state income tax free now. Then I asked "Yes but how much more is your property tax?". Well it alone almost swallowed up the difference. He didn't like bragging about that! Just broad picture statement which alone means very little....You have to live in an area that provides less govt services and/or exports the tax burden to tourists....Like Nevada.


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[Big_Hitter]

You'll freeze in WY. Try SW Idaho. It's the tropics compared to E Idaho or WY.

 

[Cedar]

I believe Wyoming is still has the 2nd lowest property taxes next to Alaska. Wyoming is subsidized my the mineral industry which helps keep services high and property taxes low. I have lived in Wyoming my whole life and love the way of life, including the weather. I know there are a lot nice places to live and WY is just one of them.

 

[daylatedollarshort]

javeline86, it sounds like you have enough money to consider living where you would be happiest, and not have taxes be your driving criteria.

 

[LARS]

Personally, if you are well-off financially (which your 5% = $15,000 state income tax implies) I personally think you are letting the tail wag the dog. Find where you want to be first and then structure your situation as best you can to minimize taxes. As an aside I have lived in Jackson Hole and you could do a lot worse assuming you can deal with the "isolation". I say this as a former NYC denizen as well...

 

[pjm-7]

If you are looking at Wyoming consider the SE corner of the state (Laramie, Cheyenne, Wheatland, Torrington). Reasonable real estate prices and close to major cities in Colorado. Downside of the northern part of the state is that it may be too conservative for most people from NYC.

 

[nwsteve]

One negative is - Washington has an estate tax which kicks in at a relatively low $2M/person.

No question, the estate tax is a downer, but since there is a spousal deduction, I believe any tax is a final heir issue and not an impact until then.
IMHO, that deferral sure beats the property taxes and climate in Texas. Frankly, I have not found a no income tax state where climate and taxes give a better solution than WA.
Nwsteve

 

[timo2]

I recommend going with the 'gorgeous area' part. and not worry about the taxes. Life is short enough as it is. That said, the sunlight basin in Wyoming is fabulous. Last time I was there is was chock full of people that had just your criteria for living somewhere. although it does snow a lot in the winter.

 

[Brat]

If you are looking for somewhat milder weather consider Clark, Cowlitz or Skamania Counties in Washington. Not far to Portland and PDX.

Avoid the Toutle River drainage area and stay well above the Cowlitz River, they are having problems with the Spirit Lake dam spillway (Mt. St. Helens debris).

 

[javeline86]

Personally, if you are well-off financially (which your 5% = $15,000 state income tax implies) I personally think you are letting the tail wag the dog. Find where you want to be first and then structure your situation as best you can to minimize taxes. As an aside I have lived in Jackson Hole and you could do a lot worse assuming you can deal with the "isolation". I say this as a former NYC denizen as well...

I'm sure there are many places where we'd enjoy living, but after having lived in high tax NYC for thirty years and watching what our substantial tax dollars get wasted on right in front of our eyes, it tends to contribute to a constant state of annoyance that actually does factor into quality of life. All things being equal, we'd prefer to live in a state with no to low taxes at this point.

 

[Big_Hitter]

you won't be able to beat WA state then

 

[youbet]

Like others said you have to factor it all in and know every variable. A good friend of mine moved across state lines to Illinois and was bragging about how his pension was state income tax free now. Then I asked "Yes but how much more is your property tax?". Well it alone almost swallowed up the difference. He didn't like bragging about that! Just broad picture statement which alone means very little....You have to live in an area that provides less govt services and/or exports the tax burden to tourists....Like Nevada.


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Yes, they have to get the money from someplace. Low or zero state income taxes often mean higher property taxes. Then you have to consider how you like your government run. High property taxes with low income taxes sometimes means more local control of spending. High income taxes sometimes means more state control and dependency on the state legislature for how things will be.

It's a complicated picture. Best analyzed by determining what your total tax picture will be in the new location and if any differences might be justified.

For example, my DS and his DW live in a snazzy Chicago suburb with high property taxes and outstanding schools. They have a special needs child who gets excellent, top notch services from the school district. Moving to another suburb to save $1k to $2k in property taxes but with a school district that does everything it can to avoid the expenses of special needs kids would be a mistake for them.

It's personal and situational.

 

[Ed_The_Gypsy]

If you are looking for somewhat milder weather consider Clark, Cowlitz or Skamania Counties in Washington. Not far to Portland and PDX.

Avoid the Toutle River drainage area and stay well above the Cowlitz River, they are having problems with the Spirit Lake dam spillway (Mt. St. Helens debris).

+1.

An ideal location. WA has no income tax and OR has no sales tax. Portland is a very cosmopolitan city as well. (I grew up there.)

A very moderate climate compared to what you are used to, as well. None of the other states you are considering come close.

The Hudson reminded me of the Columbia as well. Both have palisades (basalt hexagonal 'pilings'). The local dialect is the same in both places as well (mostly upriver NY; parts of NJ and NYC are incomprehensible to me to this day).