Key Takeaways
- Texas and New Hampshire property tax bills are rising faster than most states despite zero income tax.
- Florida home insurance costs $2,000-$2,500 annually and 15% of homes have no coverage at all.
- STR operators targeting retiree markets must account for total housing costs, not just income tax savings.
Hidden costs like rising property taxes, insurance, and healthcare are hitting folks reaching retirement age like a sledgehammer.
No matter how much retirement planning you do – and how prepared you think you are – unexpected expenses are likely and difficult to navigate when you don’t have a full-time income to rely on anymore.
States with no retirement income tax force retirees to absorb soaring property taxes and insurance premiums that can wipe out tax savings entirely.
Housing is the single largest line item in retiree budgets, and property costs in no-income-tax states are climbing faster than the tax savings they promise.
The median tax bill in the U.S. in 2024 was $3,500, which was up 2.8 percent from 2023.
Texas and New Hampshire maintain some of the nation’s highest property taxes and are seeing the fastest-growing tax burdens, with New Hampshire’s median annual property tax bill hitting $7,102 in 2025, according to a Realtor.com analysis.
Without income tax revenue, state and local governments turn to property taxes to fill their coffers.
| State | Median Tax Burden Year-over-Year | Assessment Value Year-over-Year |
| Georgia | 15.6% | 4.8% |
| Texas | 7.8% | 10.0% |
| Maine | 5.9% | 0.8% |
| New Hampshire | 5.6% | 0.0% |
| Wisconsin | 5.5% | 0.0% |
Insurance premiums hit Florida operators hardest
Florida homeowners paid a median of $2,000 to $2,500 a year just for home insurance premiums, and an estimated 15 percent of Florida homes lack coverage entirely because the cost is too prohibitive. Property taxes and insurance premiums represent the two most significant ‘hidden’ costs in tax-friendly states, explains Jiayi Xu, senior economist at Realtor.com.
Related: Miami developer launches 49-unit STR condo project
STR operators banking on retiree migration to no-tax states need to run the numbers on total housing expenses, not just income tax savings.
Moving for tax savings is only a winning strategy if other retirement costs like housing and healthcare pan out, otherwise the savings can quickly be eclipsed by the high costs you were trying to outrun.
For investors eyeing Florida tower conversions or vacation rental markets in these states, the retiree demand story depends on whether arrivals can afford to stay once they see the full cost structure.
Property tax appeals and property management expenses will eat into cash flow faster in high-tax counties, even when state income tax is zero.
