Moving to a Lower-Tax State: A Property Tax Checklist (2026)

Property tax is one of the most-cited reasons for interstate moves. Census data shows that Illinois lost a net 82,900 residents to other states in 2024; polling consistently finds property tax to be the #1 factor Illinois movers cite. Florida and Texas together absorbed about a quarter of those movers; Tennessee and Arizona combined took another meaningful share. The numbers are real. But the tax math behind them is more nuanced than the headlines suggest.

1. Compare effective rates, not nominal rates

When you read that "Illinois has a 2.2% property tax rate and Texas has a 1.7% rate," those are effective rates — tax bill divided by market value. That's the right number to compare. What you should not compare is the nominal combined rate from a tax bill, because those numbers are calculated against different bases:

Illinois composite rates (often 6–10%) apply to Equalized Assessed Value, which is ~33% of market value.
Arizona combined rates (often 5–8%) apply to Net Assessed Value, which is ~10% of LPV.
Florida millage (often 15–25 mills, i.e., 1.5–2.5%) applies to taxable value, close to market value.

The 8% Illinois composite rate and the 8% Arizona nominal rate produce totally different tax bills because they apply to totally different base values. Use the compare tool to run apples-to-apples calculations.

2. Factor in home value differences

A $400,000 home in Chicago is a 4-bed, 2-bath near the train. A $400,000 home in Nashville is a 4-bed, 3-bath with a garage and yard. A $400,000 home in Phoenix is newer, larger, and in a planned community. When you compare tax bills at the same home value, you're not comparing equivalent housing — you're comparing equivalent budgets.

This cuts in both directions. The apparent savings of moving from a high-tax state can be partially offset by buying a much nicer home for the same money. Or they can be magnified if you buy a smaller, cheaper home in the new state and put the difference into savings. Which it is depends on your choices, not on the tax math.

3. Understand how the new state's cap (or lack of one) will affect you over time

A state's first-year tax bill is easy to calculate. The 10-year bill depends on whether — and how — the state caps growth.

Florida: once you establish homestead, Save Our Homes caps assessed value growth at 3% (or CPI). Over a decade of normal appreciation, this provides meaningful protection. But your first year after buying is always at full market value — SOH doesn't help new buyers immediately.
Arizona: Prop 117 caps LPV growth at 5% annually. Similar to SOH but less aggressive.
Indiana: the 1% circuit breaker caps the total bill — so even if rates rise, your bill on a homesteaded home won't exceed 1% of gross AV.
Tennessee: no cap, but reappraisals only happen every 4–6 years, so values stay stable between cycles.
Texas: 10% annual cap on appraisal growth for homesteads. Weaker than FL or AZ but still useful.
Illinois: no general cap. Rates and assessments can rise freely.

If you're moving from Illinois to Florida expecting long-term savings, SOH is a huge piece of that equation — but only after you've been there several years. Year one is basically "what the millage says."

4. Remember that "no state income tax" isn't "no tax"

Florida, Texas, Tennessee, and Nevada have no state income tax on wages. That fact alone attracts migration, but those states recoup revenue through other taxes. Property tax in Texas is meaningfully higher than the US average — higher, on effective basis, than Illinois. Florida's sales tax is 6% state plus up to 2% local. Tennessee has one of the highest combined sales tax rates in the country (7% state + local, often totaling ~9.75%).

For a homeowner earning $100,000/year who owns a $400,000 home:

Illinois: roughly $4,950 state income tax (flat 4.95%) + $8,000 property tax = $12,950 combined.
Texas: $0 state income tax + $8,800 property tax = $8,800 combined.
Florida: $0 state income tax + $4,700 property tax = $4,700 combined.
Tennessee: $0 state income tax + $2,900 property tax = $2,900 combined.

These are rough estimates using median effective rates from our counties, and they don't account for sales tax or other state/local taxes. But the pattern is clear: combining property + income taxes is the right apples-to-apples frame for "which state costs more to live in."

5. Check whether your exemption is portable or transferable

In most states, your exemption from state A doesn't move with you. Your Texas homestead doesn't follow you to Florida. Your Florida SOH accumulation doesn't follow you to Tennessee. You start fresh in your new state.

Two exceptions worth knowing about:

Florida portability: if you sell a Florida homestead and buy another Florida homestead within three tax years, you can transfer up to $500,000 of accumulated SOH savings. This only applies within Florida.
California Prop 19: allows seniors to port their low assessed value from a California home to another California home. Doesn't help if you're leaving California.

For interstate moves, assume your clock resets on day one in the new state.

6. Don't forget the rest of the move

Property tax is one piece of a relocation decision. The other pieces — school districts, crime rates, weather, proximity to family, job availability, cost of health care, insurance premiums (Florida's homeowners insurance is notoriously expensive; Arizona's auto insurance is often higher than the national average) — can easily dwarf the tax math either way. Florida homeowners insurance alone can add $3,000–$8,000/year to housing costs for a coastal home, wiping out the state income tax savings for many middle-income earners.

We're obviously a property tax site so we focus on property tax. But we'd be misleading you if we suggested it's the dominant variable. For most people, property tax is a tiebreaker, not a primary driver.

A quick decision framework

If property tax is meaningfully influencing your move, run this checklist before you commit:

Use the compare tool to calculate your actual annual tax in both the origin and destination counties, using the actual home price you're considering (not a round-number placeholder).
Add each state's income tax and typical sales tax to get a combined annual picture.
Research homeowners insurance in the destination — get a sample quote.
Factor in any one-time move costs: realtor fees, moving company, closing costs on the new home, possibly a bridge loan.
Project out 10 years using the destination state's cap rules. Florida/Arizona savings accumulate; Illinois/Texas less so.

If the tax savings pay for the moving costs in under three years, the math supports the move. If it's five-plus years, it's a closer call. If you can't make the savings work at all, your motivation is probably somewhere other than tax.

Popular relocation corridors we track

These are the most-compared county pairs on our compare tool — chances are someone else is running the same comparison you are:

Moving to a lower-tax state.