10 Best Low-Tax States to Retire in 2027 (No Income Tax & Low Property Tax)

Direct Answer

The best overall low-tax state to retire in 2027 is Wyoming, which combines no state income tax, no estate tax, a low ~0.55% effective property tax rate, and a ~5.36% average sales tax — one of the lightest total tax burdens in the nation. The best value pick is Tennessee, with no income tax of any kind and a median home price near $315,000.

This list is for retirees focused first on minimizing taxes — on income, property, and estates — to preserve fixed incomes and pass on assets. Picks range from no-income-tax Western states to low-property-tax Southern options. Every state below is real, and they are ranked on combined income, property, sales, and estate tax burden using Tax Foundation, Census, and state revenue department data.

1. Wyoming 🏆 BEST OVERALL

Wyoming is the most tax-friendly state in the country for retirees. It has no state income tax, so Social Security, pensions, and 401(k) withdrawals are untaxed. It has no estate or inheritance tax, protecting wealth transfer.

Its effective property tax rate near 0.55% is among the lowest in the nation, and the average combined sales tax near 5.36% is well below average. Median home prices near $345,000 are pushed up by Jackson; most of the state is far cheaper.

Wyoming also has no tax on out-of-state retirement income and no gift tax, and its trust laws are favorable for estate planning. Towns like Cheyenne, Casper, and Sheridan offer lower costs than resort-driven Jackson, and the wide-open spaces, national forests, and proximity to Yellowstone appeal to outdoor-minded retirees.

It ranks #1 because no state shelters more across all four major tax categories simultaneously. The trade-off is a cold climate and limited big-city healthcare. It is for retirees, especially those with significant assets, who prioritize total tax minimization above weather.

2. Tennessee 💎 BEST VALUE

Tennessee has zero income tax after fully repealing the Hall tax on investment income in 2021. Wages, Social Security, pensions, and retirement-account withdrawals are all untaxed at the state level, and there is no estate or inheritance tax.

The median home price near $315,000 and a mild four-season climate make it livable and affordable. The offset is a high combined sales tax averaging 9.55%, the steepest among no-income-tax states.

Metros like Nashville, Knoxville, and Chattanooga each offer a different mix of music, mountains, and river recreation, with strong regional hospitals such as Vanderbilt in Nashville. The state's central location also makes much of the eastern U.S. Reachable within a day's drive.

It earns Best Value because the combination of no income tax, reasonable home prices, and a pleasant climate beats the colder no-tax Western states for most retirees. It is for those who want low taxes without leaving the temperate Southeast.

3. Florida

Florida has no state income tax, no estate tax, and a homestead exemption removing up to $50,000 of assessed home value, plus a Save Our Homes 3% annual assessment cap. Warm weather is a bonus.

Property tax effective rates are moderate near 0.8%, and there is no tax on retirement income. The main offset is homeowners insurance, averaging around $6,000 a year after recent hurricanes.

It ranks third for retirees who want a no-income-tax state with warm weather and are willing to budget for insurance.

4. Nevada

Nevada has no state income tax, no estate tax, and a low effective property tax rate near 0.5%. Retirement income of all kinds is untaxed.

The combined sales tax averages about 8.2%, the main offset. Median home prices near $450,000 are elevated by Las Vegas and Reno. The dry, warm climate (outside the north) and extensive amenities appeal to many.

It earns its spot for retirees who want no income tax and low property taxes in a warm-weather state, provided they can manage higher housing costs.

5. South Dakota

South Dakota has no state income tax, no estate tax, and a low effective property tax rate near 1.1% offset by a low sales tax near 6.4%. Median home prices near $300,000 keep it affordable.

The climate is cold with real winters, the main drawback. Sioux Falls offers solid healthcare through Sanford and Avera systems. The state is also known for favorable trust and asset-protection laws.

It ranks here for retirees prioritizing no income tax and asset protection who can handle a Northern Plains climate.

6. Alabama

Alabama does not tax income, but it does have a flat income tax of 5% on other income; critically, it exempts Social Security and most defined-benefit pension income, and its effective property tax rate near 0.4% is the second-lowest in the nation.

Median home prices near $260,000 and a warm climate make it affordable. Healthcare access is weaker in rural areas. The low property tax is the standout draw.

Residents 65 and older are also exempt from the state portion of property tax on their primary homes, pushing the effective burden even lower. Coastal Gulf Shores and Orange Beach, the Huntsville tech corridor, and college towns like Auburn give retirees a range of settings.

It earns a spot for retirees who want the lowest property taxes in the country combined with warm Southern living.

7. Texas

Texas has no state income tax and no estate tax, with warm southern regions appealing to retirees. Median home prices near $340,000 are reasonable.

The catch is a high effective property tax rate near 1.6%. Over-65 homeowners get extra exemptions and a school-tax freeze, which substantially lowers the burden for seniors. There is no tax on retirement income.

It ranks here for retirees who want no income tax and can use the senior property-tax breaks to offset the high base rate.

8. New Hampshire

New Hampshire has no tax on wages or retirement income and no sales tax, a rare combination. It fully phased out its tax on interest and dividends, so retirement income is now untaxed.

The offset is a high effective property tax rate near 1.6%, among the highest in the nation. Median home prices near $470,000 are elevated. The climate is cold with real New England winters.

It earns a spot for retirees who spend a lot (benefiting from no sales tax) and don't mind higher property taxes and cold winters.

9. Georgia

Georgia has a flat 5.39% income tax, but it fully exempts Social Security and lets residents 65+ exclude up to $65,000 of retirement income per person. For many retirees, state income tax effectively disappears.

Property taxes are moderate near 0.8%, and there is no estate tax. Median home prices near $350,000 and a warm climate add appeal.

It ranks here for retirees with substantial pension or 401(k) income who benefit most from the large retirement-income exclusion.

10. Mississippi

Mississippi exempts all retirement income — Social Security, pensions, IRA, and 401(k) withdrawals — and has no estate tax. Its flat 4.4% income tax (declining) applies only to other income.

With the lowest median home prices in the country near $190,000 and low property taxes, the total tax-plus-housing burden is minimal. Healthcare access in rural areas is the caution.

It earns tenth for the most budget-driven retirees who want full retirement-income exemption and the cheapest housing in America.

How to Choose

• Distinguish no-income-tax from low-total-tax. A state with no income tax but high property or sales taxes (Texas, New Hampshire) may cost a homeowner more than a low-total-burden state like Wyoming.
• Match the tax break to your income type. Retirees living on Social Security benefit from exemptions; those with large 401(k)s benefit most from no income tax or big exclusions like Georgia's.
• Factor estate and inheritance tax if you'll leave assets. Wyoming, Florida, Nevada, and most states here have none, protecting wealth transfer to heirs.
• Add property tax to the home price. Alabama's 0.4% rate on a $260,000 home is roughly $1,000 a year; Texas's 1.6% on a $340,000 home is over $5,000 before senior exemptions.
• Confirm healthcare access. Tax-friendly rural states can have weaker healthcare; locate near a metro hospital system to balance savings with care.

FAQ

Which state has the absolute lowest tax burden for retirees? Wyoming consistently ranks lowest, combining no income tax, no estate tax, a roughly 0.55% effective property tax rate, and a ~5.36% average sales tax. No other state minimizes all four major tax categories at once. The main trade-offs are a cold climate and limited big-city healthcare, which is why warmer alternatives like Tennessee and Florida appeal to many.

Do any states with no income tax still tax retirement accounts? No. States with no income tax — Wyoming, Tennessee, Florida, Nevada, Texas, South Dakota, and New Hampshire — do not tax 401(k), IRA, or pension withdrawals, because those are forms of income. The savings can be substantial for retirees drawing large amounts from tax-deferred accounts each year.

Are low property taxes more valuable than no income tax? It depends on your situation. A retiree who owns an expensive home but draws modest income may save more from low property taxes (Alabama, South Carolina) than from no income tax. A retiree with a large 401(k) drawdown benefits more from no income tax.

Run both numbers against your actual income and home value.

Do these states tax estates or inheritances? Most do not. Wyoming, Florida, Nevada, Texas, South Dakota, Alabama, Georgia, and Mississippi have no state estate or inheritance tax, which protects wealth passed to heirs. This matters for retirees planning to leave significant assets, since a handful of other states still impose estate taxes at varying thresholds.

Bottom Line

For retirees minimizing taxes above all, Wyoming is the Best Overall low-tax state to retire in 2027, with no income tax, no estate tax, low property tax, and low sales tax in one package. The Best Value pick is Tennessee, pairing zero income tax with a temperate climate and median home prices near $315,000.

Sources

• Tax Foundation — State Individual Income, Property, and Sales Tax data (taxfoundation.org)
• U.S. Census Bureau — American Community Survey median home value data
• State Departments of Revenue — retirement income tax treatment
• Zillow Home Value Index — state median home prices
• AARP — state retirement tax guides (aarp.org)
• Insurance Information Institute — homeowners insurance by state (iii.org)
• Kiplinger — state-by-state retiree tax guides (kiplinger.com)
• Kaiser Family Foundation — state healthcare access data (kff.org)