Retiring to NC: Financial info (home, calculation, income)

[Father John]

Results of my financial research on the best places to live in the North Carolina (and surrounding states) part of the country.

According to the Tax Foundation, in 2006 Virginia had the 10th lowest state and local tax burden in the country at 9.5 percent of income. Alaska's state and local tax burden was the lowest at 6.6 percent. Tennessee had a lower rate than Virginia at 8.6 percent. Maryland and North Carolina were both higher than Virginia at 10.7 percent and 10.5 percent, respectively. The national average was 10.6 percent.

CNN/Money listed the cheapest states (of the 50 states) to live by total tax burden as follows: #4 - Tennessee, #17 - Virginia, #18 - South Carolina, #20 - Georgia, and #23 - North Carolina. Kentucky was 32 and West Virginia was 38.

Based on my own calculations, using rates from each state's own financial web pages, with the following assumptions, the results are similar.

Assuming a $300,000 home and the state-wide AVERAGE of local taxes, an income of $80,000 per year (married filing jointly), and taxable expenditures of $50,000 per year in state, the total tax burden (in order of cheapest state) would be as follows:

Tennessee: $5,821
Kentucky: $8,911
Georgia: $10,252
N. Carolina: $10,423
W. Virginia: $12,636
Virginia: $14,401

I included Arizona (my home state right now) and Michigan (where my wife's family lives) for comparison. Arizona's tax burden with the above assumptions is $11,461 and Michigan's is $12,748.

Your mileage may vary. Property taxes DO vary by LOCAL taxes. Living OUTSIDE a city and paying only county or state taxes will cut property tax roughly in half. The lowest STATE-wide property tax (not including any local taxes) is Tennessee's .0282% rate followed by North Carolina's 0.313% rate (0.000313 time home value).

I hope this is interesting and/or helpful to those contemplating a move.