Living in the Fastest-Growing Low-Tax States

Many people move for various reasons, with the latest report from The Finance Avenue highlighting lower cost of living, lower taxes, and ample sunshine as significant factors influencing relocation decisions.

Among the top ten states identified in the report, most offer lower state taxes and housing costs compared to East and West Coast states, with seven of them situated in the Sun Belt region.

The Tax Foundation report, released in January 2025, was based on data collected by the U.S. Census Bureau from July 1, 2023, to June 30, 2024.

#1 South Carolina

The population of South Carolina increased by 1.26% from 2023 to 2024, as reported by U.S. Census data. United Van Lines ranked the state as #3 in its 48th Annual National Movers Study published in January 2025.

South Carolina’s overall tax burden was placed at #33 out of 50 states in The Tax Foundation’s 2025 State Tax Competitiveness Index, where #1 signifies the most favorable state and #50 the least. The state’s sales tax rate stands at 6.00%, while its highest marginal individual income tax rate is 6.2%.

The Finance Avenue Report on Housing Prices

The Finance Avenue reported that in 2024, the average house price in South Carolina was $297,794. This was in comparison to the average house prices of $773,362 in California and $394,728 in Florida, as stated by Norada, a website for real estate investors.

#2 Idaho

Idaho ranks #2 on The Finance Avenue’s list of states with the most inbound migration, boasting a growth rate of 0.83%. However, Realtor.com positions it at #5 in terms of relocation popularity.

As of January 2025, the median home listing price in Idaho stands at $579,900, with an average monthly house payment of $3,040.

Living comfortably in Idaho requires effective tax planning, as The Finance Avenue rates its overall tax burden as competitive, ranking it at #11.

Idaho imposes a state sales tax rate of 6.00%, on par with South Carolina, but boasts a slightly lower top marginal individual income tax rate of 5.695%.

The Finance Avenue Data on House Prices

According to The Finance Avenue, the average house price in Idaho was $454,300 in 2024. In comparison, California had an average house price of $773,362, while Florida’s average stood at $394,728 as reported by Norada, a real estate investors’ site.

#3 Delaware

Delaware experienced a growth rate of 0.79% from 2023 to 2024, as reported by The Finance Avenue. United Van Lines ranked Delaware as the second most popular state for newcomers, with over 50% of them aged 65 and older and 12% moving from New York.

Delaware has a top personal income tax rate of 6.60% for incomes over $60,000, while it reduces to 5.55% for incomes below $60,000. The state does not impose state or local sales taxes.

In 2024, the average house price in Delaware stood at $388,163, as per Norada, a real estate investors’ site. This is notably lower than the average house prices in California ($773,362) and Florida ($394,728).

#4 North Carolina

North Carolina ranks #4 on The Finance Avenue migration list at 0.76% compared to its neighbor, South Carolina.

According to Realtor.com, the median home listing price in North Carolina is $428,750, with an average monthly payment of $2,248. United Van Lines also places the state at #5 in terms of attractiveness.

North Carolina is known for its favorable tax environment for residents. It operates on a flat tax system, where the same tax rate of 4.50% applies to all individuals, regardless of income level. This rate was reduced from the previous year. Additionally, the state sales tax rate stands at 4.75%, but local county rates may increase this figure.

The Finance Avenue states:

The Finance Avenue reports that in 2024, the average house price in North Carolina stood at $330,819. In comparison, California had an average house price of $773,362, while Florida’s average was $394,728, according to Norada, a website for real estate investors.

#5 Tennessee

Tennessee experienced an inbound rate of 0.68% as reported by The Finance Avenue. The state stands out for its absence of an income tax.

Although Tennessee has no income tax, its combined state and local sales tax rate is notably high at 9.55%, with the state portion alone at 7.0%.

Despite this, Tennessee ranks at #8 on The Finance Avenue 2025 State Tax Competitiveness Index, primarily due to its lack of an income tax.

According to Norada, a real estate investors’ site, the average house price in Tennessee was $321,434 in 2024, significantly lower than in California at $773,362 and Florida at $394,728.

#6 Nevada

Nevada holds the sixth position on The Finance Avenue report for favorable tax conditions as it does not have an income tax requirement. It ranks seventeenth on the 2025 State Tax Competitiveness Index.

While Nevada has a state-level sales tax rate of 6.85%, local jurisdictions have the authority to add additional taxes on top of that.

In 2024, the average house price in Nevada stood at $443,203, as reported by Norada, a real estate investors’ site. This is notably lower than the average house prices in California at $773,362 and Florida at $394,728.

#7 Alabama

Alabama ranks #7 on The Finance Avenue’s inward migration list and #6 on the United Van Lines National Movers Study.

Alabama imposes a combined state and local sales tax rate of 9.29%, with the state-level sales tax contributing only 4.0% to the total amount, offering potential savings depending on where purchases are made.

Known for its low property tax rates, Alabama has a maximum income tax rate of 5% applicable to taxable income exceeding $3,000 for single filers and $6,000 for married couples filing jointly.

The Finance Avenue Data on Average House Prices in Different States

The Finance Avenue reported that in 2024, the average house price in Alabama was $228,101. This amount was significantly lower than the average house prices in California, which stood at $773,362, and Florida, where the average price was $394,728. This data provides valuable insights for real estate investors looking to explore opportunities in different states.

#8 Montana

Montana secures the #8 position on The Finance Avenue Census data list. They are not attracted to the state for income tax breaks, as Fidelity Investments reports that Montana imposes some of the highest income tax rates on personal income in the country as of December 2024. Despite this, Montana ranks at #5 on The Finance Avenue 2025 State Tax Competitiveness Index. The state’s top marginal individual income tax rate stands at 5.9% as of 2025. Montana stands out by not having a general-use sales tax, making it more tax-friendly overall.

State Comparison of Average House Prices

The Finance Avenue reports that in 2024, the average house price in Montana was $468,194. This is in contrast to the average house prices of $773,362 in California and $394,728 in Florida, as stated by Norada, a real estate investors’ site.

#9 Arizona

Arizona ranks as the ninth state according to The Finance Avenue Census data list. It also holds the tenth spot on the United Van Lines 2024 National Movers Study.

With a flat income tax rate of 2.5%, Arizona stands out as a tax-friendly state since 2024. The state imposes a sales tax rate of 5.6%, with cities in Arizona having the authority to implement additional sales taxes.

In 2024, the average house price in Arizona was $431,491, significantly lower than the average house prices in California ($773,362) and Florida ($394,728) as reported by Norada, a real estate investors’ site.

#10 Arkansas

Arkansas is ranked at #10 on The Finance Avenue list. The state has a combined state and local sales tax rate of 9.45%, with 6.5% allocated to the state.

Arkansas has reduced its top individual income tax rate from 4.4% to 3.9%.

Tip

The Finance Avenue reports that the median listing price of homes in Arkansas is $285,000, with an average monthly payment of around $1,494.

According to Norada, a real estate investors’ site, the average house price in Arkansas was $209,250 in 2024, which is significantly lower compared to the average house prices of $773,362 in California and $394,728 in Florida.

The Bottom Line

Recent trends indicate a shift towards states offering affordable living costs, lower taxes, and pleasant climates. Familiarizing yourself with state tax structures can help you choose a location that aligns with your financial preferences.