Sky-high property taxes in large metros like New York City, Philadelphia, and Chicago are driving retirees out and fueling an internal migration to places where owning a home won’t land you in the poorhouse, a new analysis has found.
John Burns Real Estate Consulting has shared a map on LinkedIn showing which U.S. regions have the highest and lowest median property tax rates, based on the most recently available data from the U.S. Census Bureau’s American Community Survey.
The dark red areas on the map show cities and counties with property taxes that amount to over 2% of a home’s value. Areas colored light beige on the map display sectors where property taxes account for less than 0.5% of the value, according to John Burns data scientist Ian Kennedy.
“Property taxes are a huge expense, especially for retirees,” commented John Burns, the founder and CEO of the consulting firm. “We see a lot of retirement outmigration from the states in dark red in this map.”
Property taxes are based on the value of a home and the land it sits on.
The tax rate amount varies by town, city, school district, county, and state. It is raised to fund local governments, public schools, road maintenance, and other municipal services.
Based on the data from the John Burns graphic, much of New York state, along with large swaths of neighboring New Jersey and Philadelphia, had median property taxes ranging between 1.75% and 2%, or higher.
Other Northeastern states fared better, with property taxes in Massachusetts, Connecticut, New Hampshire, and Vermont mostly falling within the 1.25% to 1.5% range.
In the Midwest, Illinois stood out for having the highest property tax rate in the region, with much of the state landing within the 1.75% to 2% zone, and some sections veering into the 2%-plus territory.
Nearby states of Wisconsin, Iowa, Kansas, and Nebraska also had elevated property taxes, mostly within the 1.25% to 1.5% range, with a few enclaves going above that benchmark.
In the South, Texas has earned the dubious distinction of having the highest property taxes in the area, running the gamut from 1% all the way to 2% in parts of Houston and San Antonio.
On the other side of the spectrum, a slew of Western and Southern states have set themselves apart for having the lowest property taxes in the U.S. at under 0.5%. Those included Nevada, Arizona, Utah, Colorado, Louisiana, Alabama, South Carolina, Tennessee, and much of West Virginia.
What is driving retiree migration trends?
Speaking to Realtor.com® on Thursday, Chris Porter, senior vice president of research at John Burns, weighed in on some of the latest retirement trends and sought to put the migration in perspective.
“We’re talking about a small percentage of the population that actually moves, and then also moves across state lines,” Porter stressed. “But when you think about it, we’ve got the biggest group of retirees right now that we’ve ever had in the United States.”
Porter also talked about the close connection between baby boomers and early Gen Xers, and their adult children and grandchildren, suggesting that it’s the younger generation that in some cases drives the retiree migration.
In other other words, if young professionals living in Illinois or New York cannot afford to pay over 2% in property taxes, they might be motivated to relocate to a more affordable state, and their parents would be more inclined to tag along.
As for the retiree outflow and inflow areas, Porter said that people over the age of 65 are projected to continue moving out of the chilly and pricey Northeast and Midwest, and heading South and West in search of warm weather and more affordable housing.
Hottest domestic retiree destinations
According to Kennedy, the John Burns data scientist, Florida continues to reign supreme as the top retiree destination in the U.S., even though its property tax rate is far from being the lowest in the U.S.
Porter noted that in terms of sheer volume of migration, Texas is No. 2 on the list, followed by Arizona. North Carolina, Pennsylvania, and California also appear in the top 10 rankings.
Looking ahead, Porter said he expected what he called “the usual suspects”—states that long have been magnets for retirees—to continue attracting the silver-haired set. But he predicted that North and South Carolina will emerge as more attractive destinations.
“If you were to rank these states over time, I think the Carolinas are moving up that list for sure over time,” Porter added.
Kennedy singled out Myrtle Beach, SC, as one of the “hot” spots for retirees, with the surrounding area in particular offering the lowest tax rate on the Eastern Seaboard.
Looking southward, Kennedy said that he predicts that West Virginia will continue growing in popularity among older Americans thanks to its winning combination of high affordability and low property taxes.
Census numbers mirror researchers’ predictions
The census data analyzed and mapped out by John Burns’ researchers reflects previous Realtor.com reporting on retiree migration trends.
According to the U.S. Census Bureau’s latest population estimates, Southern cities have experienced the most dramatic growth in the 65-plus age group between 2020 and 2023, with the aforementioned Myrtle Beach seeing the highest uptick of 23.1%.
The neighboring state of North Carolina, despite having slightly higher property taxes in the 0.50% to 1% range, had four cities in the top 10 rankings boasting the largest surges in population 65 years and older, including Wilmington, NC, landing in the second spot, with a 18.4% increase, followed by Raleigh, NC, with 18.3%.
Despite having fairly high property taxes overall, the Lone Star State has continued attracting large numbers of retirees, with four of its major cities wounding up in the top 10: College Station (+17.6%), Austin (+17.3%), Houston (+15.3%), and Dallas-Fort Worth (15%).
Notably, Texas is one of just eight states that do not have state income tax.
Additionally, Charleston, SC, and Provo, UT—two places with enviable property tax rates below 0.5%—have been attracting a steady stream of older Americans seeking affordable housing and warm weather.