California suburbs from a drone point of view.

Before you uproot your family to lower your property taxes, consider other details that can help you lower your total cost of living, and whether moving is the right choice for you now. (Getty Images)

In a 1789 letter to Jean-Baptiste Le Roy that referenced the establishment of the U.S. Constitution, Benjamin Franklin stated that “in this world nothing can be said to be certain, except death and taxes.” The quotation can be attributed to other sources, but there isn’t much escaping the fact that it’s true.

Among the many taxes we pay are sales tax, income tax, estate tax and the capital gains tax. And, of course, there is property tax.

In owning real estate, there are associated taxes, which vary depending on the location, how you use the property, its condition, size and more. How a locality determines property value differs by state, city and township, but real estate taxes are a very real part of property ownership. And who doesn’t want to lower their taxes?

The federal tax reform finalized in 2017 limited state and local property tax deductions to $10,000, when it used to be unlimited. As a result, much of our tax deductibility has been drastically changed, and some people are debating whether they would benefit from a move to reduce their property tax bill.

[Read: What Will the Housing Market Look Like in the Next Recession?]

Before you move to lower your property tax bill, Jodi Carter, a certified public accountant in New York City, recommends looking at the bigger picture.

“This change in the law sent people scrambling for solutions before they understood the implications. For example, if you can no longer deduct real estate taxes of $10,000, your overall homeownership costs may have increased by $2,000 to $3,000 per year," Carter says. "Moving is a pretty extreme solution if that is the problem. It makes sense to consider a move if you are committed to lowering your overall costs, but to do so just to manage income taxes is not going to be an appropriate choice for most people. Focusing on the cost of the home, maintenance and, yes, property taxes, can have a significant impact on your financial life.”

If you are looking to lower your homeownership costs by moving, here are a few things to consider regarding how real estate taxes might factor in.

Carefully Establish Criteria That Are Important to You

One surprise that some people find in certain metropolitan areas is that the real estate tax rates are often much higher in the suburbs. Many people have come to accept the longer commute and the responsibilities that come with owning a single-family home in exchange for the benefits of a larger home with more square footage, fresher air, more green space and in some cases more affordable public schools.

Indeed, the higher property tax can be offset by the savings that many parents find when they no longer have to shell out the dough for often jaw-dropping private school tuitions – as high as $40,000 in some cases.

Certain counties or neighborhoods have higher real estate taxes than others, maybe just a mile away, because of the funds allocated to the local public schools. For many suburbs, like in New York’s Westchester County, property taxes are the main source of public funding.

For example, one couple who lived in the suburbs of New York City moved immediately after their youngest kid went off to college. They’d been paying high real estate taxes because the local public school was one of the best in the country. Once their kids were no longer using the public school, they felt that it would be economically wise to move to another town. They moved to a larger house, but in so doing, paid lower real estate taxes because they no longer needed the school system. Years later, they moved to a different part of the state where the town does not have a local public school, and thus lowered their real estate taxes even more.

[Read: Condo, Townhouse or Co-Op: Which Is Right for You?]

Move to a Town That Has a Lot of Local Business

There is something undeniably charming about living in a sleepy village where the most action is at the intersection of State and Main, with a handful of restaurants, an ice-cream parlor, a farmers’ market and an art gallery or two. But this means there may not be any large businesses helping to cover the real estate taxes. Especially when a suburban town is made up of primarily residential neighborhoods, there aren't many businesses to pay commercial property taxes.

Towns with larger employers not only have the business to help support the tax base, but also the added employment opportunities for the local population, which in turn attracts more residents and can spread out property tax needs among more people.

“If you choose a town that has a big tax base, this helps to keep the taxes lower,” says Michael F. Levy, the principal broker of Grand Lux Realty, a real estate brokerage in Westchester County. “This is why a house in Armonk might have half the taxes of a house in Scarsdale or Larchmont (just a few miles away).”

Buy an Older House and Renovate Instead of Buying New

When moving, you should weigh the pros and cons of buying something brand-new versus taking on a project and updating an older property. Aside from determining whether you have the bandwidth to undertake a renovation, the real estate taxes may play a bigger role than you thought in gauging that decision.

“Another thing that helps to keep taxes lower is increased development,” Levy says. In terms of real estate taxes, he says, “An old house might cost a third of a new house. This helps keep taxes down for everyone.”

If you have the bandwidth to renovate, buying an old house with low real estate taxes and renovating it could be more cost-effective in the long run than buying a brand-new home on a comparable plot of land, since new construction is assessed at a higher tax rate. If you stick to the basic layout of the old house and don’t move walls or add to the footprint, the permitted work likely won't require a new tax assessment by the county or city.

Since new development can add a lot to the tax base, Levy adds, “if a moratorium is placed on new development in a small town, then the taxes may significantly increase over the next year or so.”

To encourage new construction, a city may allow for a tax abatement for newly built properties. The abatements for ground-up development can be passed along to the new buyers with the understanding that real estate taxes would be increased on a predetermined schedule over a 10- to 25-year period. If you can take advantage of tax abatement on new development, that can be a great way to lower your real estate tax bill in the short term, but with the understanding of how and when that abatement will end.

[Read: Size Doesn't Always Matter: 3 Reasons Why the Home Floor Plan Matters More Than Square Footage]

Beware, though: For conversions, where an older structure is renovated and marketed as new, the property is often sold based on the real estate taxes of the previous structure, which was likely not the level of luxury it is now. The new owner can be assured of paying higher taxes as soon as the property is reassessed.

For example: One building that had consisted of small, unrenovated rental apartments might not have carried terribly high property taxes. Once the building was gutted and turned into sprawling condominium homes with high-end finishes, the certificate of occupancy prompted a tax reassessment, not dissimilar to the example of overhauling an older suburban house.

In general, real estate taxes can get complicated the deeper you delve. A local real estate agent or financial adviser can help you navigate how taxes might differ from town to town, or even neighborhood to neighborhood.


The 25 Best Affordable Places to Live in the U.S. in 2019

Find an affordable place to call home.

Photo of colorful bars, clubs and businesses at the famous Sixth Street music and entertainment district of downtown Austin, Texas, USA, illuminated at night.

(Getty Images)

Your ability to be financially comfortable is a key part of deciding where you want to live. Based on a survey of more than 2,000 U.S. residents on the importance of various factors in determining where to live, U.S. News weighted value at 25% – making it one of the key metrics used to calculate the Best Places to Live. To pinpoint the most affordable places on the list, we looked at what portion of the median annual household income goes toward the average cost to own or rent a home, plus the typical cost of utilities and taxes.

25. Charlotte, North Carolina

25. Charlotte, North Carolina

charlotte north carolina city skyline

(Getty Images)

Best Places 2019 Rank: 20
Metro Population: 2,427,024
Median Annual Salary: $50,150
Income Spent on Living Expenses: 21.77%

Charlotte takes the No. 25 spot on the list, with residents spending just 21.77% of their household income on housing expenses. At $50,150, the median annual salary for Charlotte residents just about matches the national average of $50,620.

24. St. Louis

24. St. Louis

This is a photograph of the old courthouse in front of the St. Louis arch in the middle of the day.

(Getty Images)

Best Places 2019 Rank: 81
Metro Population: 2,804,998
Median Annual Salary: $49,180
Income Spent on Living Expenses: 21.53%

Missouri’s largest metro area offers more affordability compared with other places in the U.S. of the same size. For instance, Baltimore and Tampa, Florida, can’t match the 21.53% cost of living compared to household income that St. Louis offers.

23. Little Rock, Arkansas

23. Little Rock, Arkansas

Little Rock, Arkansas

(Getty Images)

Best Places 2019 Rank: 88
Metro Population: 730,346
Median Annual Salary: $43,780
Income Spent on Living Expenses: 21.52%

The capital of Arkansas is the 23rd-most affordable place to live on our list, with a blended annual household income, which includes household income for both renters and homeowners, of $55,911. After housing costs are covered, Little Rock residents typically keep more than 78% of their income to dedicate to other expenses.

22. Syracuse, New York

22. Syracuse, New York

Crouse College Bell Tower, Eggers Hall, Maxwell School, Tolley, Hall of LanguagesSyracuse, New YorkUpstate New YorkNew York State

(Tony Shi Photography/Getty Images)

Best Places 2019 Rank: 54
Metro Population: 659,262
Median Annual Salary: $49,850
Income Spent on Living Expenses: 21.51%

This upstate New York metro area is a far more affordable living option compared to New York City, one of the most expensive places to live in the U.S. Syracuse is also one of the few metro areas that's not located in Middle America in the 25 Best Affordable Places to Live list.

21. Minneapolis-St. Paul

21. Minneapolis-St. Paul

Last minute vacation in Minneapolis, Minnesota

(Getty Images)

Best Places 2019 Rank: 6
Metro Population: 3,526,149
Median Annual Salary: $56,030
Income Spent on Living Expenses: 21.5%

Minneapolis-St. Paul is the most populous metro area on the 25 Best Affordable Places to Live list. Not only are residents spending a smaller portion of their household income on housing – just 21.5% – they’re also bringing home more money. The median annual salary is $56,030.

20. Lexington-Fayette, Kentucky

20. Lexington-Fayette, Kentucky

Buildings in Lexington, Kentucky - old and new.

(Getty Images)

Best Places 2019 Rank: 29
Metro Population: 500,689
Median Annual Salary: $43,270
Income Spent on Living Expenses: 21.49%

Lexington-Fayette has deep roots in the equestrian and agriculture industries, with plenty of farmland just outside the city centers. This helps keep the metro area’s cost of living low, at just 21.49% of the household income.

19. Raleigh and Durham, North Carolina

19. Raleigh and Durham, North Carolina

Durham, North Carolina, USA downtown cityscape.

(Getty Images)

Best Places 2019 Rank: 10
Metro Population: 1,824,266
Median Annual Salary: $53,788
Income Spent on Living Expenses: 21.47%

Referred to as the Research Triangle on account of the plethora of research companies and major universities based in the area – including Duke University, the University of North Carolina—Chapel Hill and North Carolina State University – Raleigh and Durham enjoy a relatively low cost of living. Residents spend just 21.47% of their household income on living costs.

18. Tulsa, Oklahoma

18. Tulsa, Oklahoma

Tulsa downtown skyline with trees and the Arkansas river in the foreground.

(Getty Images)

Best Places 2019 Rank: 83
Metro Population: 977,869
Median Annual Salary: $45,260
Income Spent on Living Expenses: 21.45%

Residents of the Tulsa area spend just 21.45% of the median household income on the cost of living. The overall cost of owning a home in Tulsa is low as well: The median home price is just $149,000, according to Zillow, which is well below the national average of $227,025.

17. Greenville, South Carolina

17. Greenville, South Carolina

Drone aerial of the downtown Greenville South Carolina SC skyline at sunrise.

(Getty Images)

Best Places 2019 Rank: 22
Metro Population: 872,463
Median Annual Salary: $43,230
Income Spent on Living Expenses: 21.44%

Ranking No. 22 on the overall Best Places to Live list, Greenville enjoys a low cost of living with residents spending just 21.44% of the median household income on housing. And a steadily growing number of people are able to benefit from this low cost of living: Greenville's population grew by 4.9% due to net migration between 2013 and 2017, according to the U.S. Census Bureau.

16. Kansas City, Missouri

16. Kansas City, Missouri

Kansas City, Missouri, USA – Aug. 16th, 2015.  A view of The Power & Light District in Kansas City

(Getty Images)

Best Places 2019 Rank: 49
Metro Population: 2,088,830
Median Annual Salary: $49,460
Income Spent on Living Expenses: 21.43%

This metro area that straddles both Missouri and Kansas is home to more than 2 million residents, but it still maintains greater affordability than most major metro areas. Kansas City residents dedicate just 21.43% of their household income to the cost of living.

15. Wichita, Kansas

15. Wichita, Kansas

Downtown Wichita skyline with a waterway and park in the foreground.

(Getty Images)

Best Places 2019 Rank: 79
Metro Population: 642,339
Median Annual Salary: $43,880
Income Spent on Living Expenses: 21.42%

While there are more than 600,000 residents in this Kansas metro area, Wichita maintains a small-town feel – with a low cost of living to match. Residents use just 25.88% of their household income to cover rent or mortgage payments, utilities and taxes.

14. Omaha, Nebraska

14. Omaha, Nebraska

Omaha, Nebraska is one of the best fall family vacations

(Getty Images)

Best Places 2019 Rank: 32
Metro Population: 914,190
Median Annual Salary: $47,660
Income Spent on Living Expenses: 21.29%

With a median annual salary of $47,660, Omaha takes the No. 14 spot. The largest metro area in Nebraska, which ranked a bit higher at No. 8 last year, has seen a slight increase in the cost of living. Still, residents spend just 21.29% of their household income on housing.

13. Youngstown, Ohio

13. Youngstown, Ohio

Youngstown is a city in and the county seat of Mahoning County in the U.S. state of Ohio, with small portions extending into Trumbull County.

(Getty Stock Images)

Best Places 2019 Rank: 97
Metro Population: 548,821
Median Annual Salary: $41,360
Income Spent on Living Expenses: 21.18%

With a little more than a half-million residents, the Youngstown metro area has a cost of living that requires 21.18% of the median household income. The median home price for the metro area is low as well, at just $86,850, more than $140,000 below the national average.

12. Louisville, Kentucky

12. Louisville, Kentucky

View of Louisville at dusk from the Indiana side with Ohio river in foreground, Louisville, Kentucky, USA

(Bob Stefko/Getty Images)

Best Places 2019 Rank: 64
Metro Population: 1,278,203
Median Annual Salary: $45,100
Income Spent on Living Expenses: 21.11%

As the No. 15 Best Affordable Place to Live in 2018, Louisville has climbed three spots to rank 12th on the list this year. With a median annual salary of $45,100, Louisville residents spend 21.11% of their household income on living expenses.

11. Buffalo, New York

11. Buffalo, New York

Downtown Buffalo skyline along the historic waterfront district. Buffalo is a city in the U.S. state of New York and the seat of Erie County located in Western New York on the eastern shores of Lake Erie. Buffalo is known for its close proximity to Niagara Falls, good museums and cultural attractions

(Getty Images)

Best Places 2019 Rank: 52
Metro Population: 1,136,670
Median Annual Salary: $48,180
Income Spent on Living Expenses: 21.11%

Beating Louisville by a ten-thousandth of a percent for the portion of income that goes toward housing, Buffalo is the second upstate New York metro area to make the top 25. Residents in the Buffalo area benefit from a low cost of living, with just 21.11% of the median household income spent on living expenses.

10. Cincinnati

10. Cincinnati

Cincinnati at sunrise watching cars cross the bridge.

(Getty Images)

Best Places 2019 Rank: 39
Metro Population: 2,156,723
Median Annual Salary: $48,890
Income Spent on Living Expenses: 21%

Cincinnati residents spend slightly less than Buffalonians on housing costs. The typical cost of living is 21% of the median household income.

9. Baton Rouge, Louisiana

9. Baton Rouge, Louisiana

(Getty Images)

Best Places 2019 Rank: 109
Metro Population: 828,741
Median Annual Salary: $44,500
Income Spent on Living Expenses: 20.79%

It may be ranked No. 109 on the overall Best Places to Live list, but Baton Rouge ranks high when it comes to affordability. Baton Rouge residents spend just 20.79% of their income on housing costs.

8. Lafayette, Louisiana

8. Lafayette, Louisiana

Lafayette is a city in and the parish seat of Lafayette Parish, Louisiana

(Getty Images)

Best Places 2019 Rank: 96
Metro Population: 487,633
Median Annual Salary: $39,940
Income Spent on Living Expenses: 20.76%

The second Louisiana metro area on the Best Affordable Places to Live list, Lafayette has a cost of living of just 20.76% of the median household income. The low cost of living helps balance out the area's lower median annual salary, which at $39,940 is more than $10,000 below the national average.

7. Indianapolis

7. Indianapolis

Image of the Indianapolis skyline with busy traffic and dramatic sky.

(Getty Images)

Best Places 2019 Rank: 38
Metro Population: 1,989,032
Median Annual Salary: $48,030
Income Spent on Living Expenses: 20.72%

Indianapolis is one of two Indiana metro area to crack the top 10 of the Best Affordable Places to Live list. Indianapolis residents spend just 20.72% of their household income on rent, mortgage payments, utilities and taxes.

6. Grand Rapids, Michigan

6. Grand Rapids, Michigan

Grand Rapids Michigan skyline along the banks of the Grand river.

(Getty Images)

Best Places 2019 Rank: 13
Metro Population: 1,039,182
Median Annual Salary: $44,770
Income Spent on Living Expenses: 20.68%

Money goes further in Grand Rapids than most parts of the U.S. While the median annual salary is below the national average of $50,620, metro area residents spend just 20.68% of the median household income on living expenses.

5. Pittsburgh

5. Pittsburgh

(Getty Images)

Best Places 2019 Rank: 50
Metro Population: 2,348,143
Median Annual Salary: $48,580
Income Spent on Living Expenses: 20.51%

Located in the western part of Pennsylvania, Pittsburgh enjoys a more affordable cost of living than Philadelphia to the east. Residents of the Steel City and its surrounding area spend just 20.51% of their household income on rent or mortgage payments and utilities.

4. Fayetteville, Arkansas

4. Fayetteville, Arkansas

Two rowers on foggy Lake Fayetteville at sunrise out for morning exercise silhouetted against the sunrise reflection

(Getty Images)

Best Places 2019 Rank: 4
Metro Population: 514,166
Median Annual Salary: $45,830
Income Spent on Living Expenses: 20.44%

Fayetteville continues to grow in population – having increased by 6.94% between 2013 and 2017 due to net migration alone – but the area maintains a low cost of living. Residents spend just one-fifth of their household income on housing costs.

3. Des Moines, Iowa

3. Des Moines, Iowa

A photo of Pioneer Statue with Downtown Des Moines in the background.

(Getty Images)

Best Places 2019 Rank: 5
Metro Population: 623,113
Median Annual Salary: $50,600
Income Spent on Living Expenses: 20.11%

Des Moines has long been known for its low cost of living. After taking the top spot in the Best Affordable Places to Live in the U.S. ranking in 2016 and 2017, the capital of Iowa holds onto its No. 3 spot from last year. Des Moines residents spend just 20.11% of the median annual household income on living costs.

2. Fort Wayne, Indiana

2. Fort Wayne, Indiana

FortWayne, Indiana

(Getty Images)

Best Places 2019 Rank: 40
Metro Population: 429,060
Median Annual Salary: $43,590
Income Spent on Living Expenses: 19.57%

Residents of Fort Wayne, one of the least-populated metro areas in the Best Places to Live ranking with under 500,000 residents, benefit from spending less on housing. The cost of living in Fort Wayne is just 19.57% of the median household income.

1. Huntsville, Alabama

1. Huntsville, Alabama

Downtown Huntsville, Alabama on a sunny day.

(Getty Images)

Best Places 2019 Rank: 11
Metro Population: 444,908
Median Annual Salary: $53,600
Income Spent on Living Expenses: 19.3%

Huntsville is the most affordable place to live out of the 125 most populous metro areas in the U.S. for the second year in a row. An above-average median annual salary and low cost of living mean Huntsville residents are keeping more money in their pockets to devote to other things. Just 19.3% of the median household income in Huntsville goes toward housing costs.

The Best Affordable Places to Live in the U.S. include:

The Best Affordable Places to Live in the U.S. include:

USA, Florida, Stuart, Aerial view of suburbs

(Getty Images)

  • Huntsville, Alabama
  • Fort Wayne, Indiana
  • Des Moines, Iowa
  • Fayetteville, Arkansas
  • Pittsburgh
  • Grand Rapids, Michigan
  • Indianapolis
  • Lafayette, Louisiana
  • Baton Rouge, Louisiana
  • Cincinnati
  • Buffalo, New York
  • Louisville, Kentucky
  • Youngstown, Ohio
  • Omaha, Nebraska
  • Wichita, Kansas
  • Kansas City, Missouri
  • Greenville, South Carolina
  • Tulsa, Oklahoma
  • Raleigh and Durham, North Carolina
  • Lexington-Fayette, Kentucky
  • Minneapolis-St. Paul
  • Syracuse, New York
  • Little Rock, Arkansas
  • St. Louis
  • Charlotte, North Carolina

Read More

Tags: real estate, housing, housing market, moving, taxes, property taxes


Steven Gottlieb has been at Warburg Realty in New York City for seven years and is a well-respected industry expert. Born and raised in Manhattan, Gottlieb earned his bachelor’s degree from the University of Pennsylvania, his MBA from the University of Michigan in Ann Arbor and his Master of Science in Real Estate from New York University. Prior to joining Warburg, Gottlieb lived in Los Angeles and worked with some of the biggest Hollywood talent in the world at United Talent Agency and Paradigm Agency. His strong referral base is a testament to his success and reputation in the business, and in 2018, The Gottlieb Team was the No. 1 producing team at Warburg Realty, company-wide.

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