Best States for Homebuyers: No Income Tax + Affordable Homes
No state income tax sounds great in theory. But many no-income-tax states compensate with sky-high property taxes, high home prices, or both. Here’s the honest scorecard.
The 9 No-Income-Tax States
| State | No Income Tax | But... |
|---|---|---|
| Florida | ✅ | High home prices, hurricane insurance |
| Texas | ✅ | Highest property taxes in the Sun Belt |
| Nevada | ✅ | Good value, lower property taxes |
| Washington | ✅ | Very expensive housing (Seattle effect) |
| Tennessee | ✅ | Low property tax, rising prices |
| Wyoming | ✅ | Very small population, limited jobs |
| South Dakota | ✅ | Cold, limited city options |
| Alaska | ✅ | Remote, expensive logistics |
| New Hampshire | ✅ | High property taxes, smaller state |
The Rankings: Combining Tax Savings + Housing Affordability
🥇 1. Tennessee — Best Overall
- No state income tax
- Property tax rate: 0.65%/year (very low)
- Median home price: Nashville $475K, Memphis $185K, Knoxville $285K
- Nashville is expensive but Memphis and Knoxville offer real value
- Growing economy: healthcare, automotive, logistics
🥈 2. Nevada — Best for Affordability
- No state income tax
- Property tax rate: 0.60%/year
- Las Vegas median: $415,000 — reasonable for a major metro
- Reno: $495,000 — strong growth market
- Tax math works well for middle and upper-middle earners
🥉 3. Texas — Best for High Earners
- No state income tax saves $10K+ for high earners
- But 1.87–1.96% property taxes offset savings for average earners
- Best value cities: Houston ($295K), San Antonio ($285K)
- Net tax advantage only kicks in meaningfully above $150K income
4. Florida — Good for Retirees
- No income tax is huge for retirement income (Social Security, investments)
- But hurricane insurance adding $300–$600/month in coastal areas
- Best value: Tampa ($375K), Orlando ($380K), Jacksonville ($315K)
5. Wyoming — Best Kept Secret
- No income tax
- Property tax: 0.57%/year (very low)
- Cheyenne median: $335,000 — surprisingly affordable
- Limited job market unless you work remotely
The States to Avoid Despite No Income Tax
Washington State: No income tax sounds amazing until you see Seattle’s $825,000 median price. The tax saving doesn’t offset the housing premium vs comparable cities.
New Hampshire: 1.86% property tax nearly cancels the income tax benefit. A $400K home costs $7,440/year in property taxes.
The Real Math: Tennessee Example
A family earning $120,000 moving from California to Nashville:
- California state income tax saved: ~$8,000/year
- Tennessee income tax saved: $8,000 (no Tennessee tax)
- Tennessee property tax on $475K home: $3,088/year
- California equivalent property tax would have been: ~$4,275/year
- Net annual savings vs California: ~$9,187/year
That’s real money. Over 10 years: $91,870 in tax savings.
Summary: The Winners
For most homebuyers balancing tax savings with housing value:
- Tennessee (Nashville/Knoxville/Memphis)
- Nevada (Las Vegas/Reno)
- Texas (Houston/San Antonio — not Austin)
- Florida (Tampa/Orlando/Jacksonville)