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The largest generation in US history is retiring and buying property in the state with no income tax.

This explains very little. State income tax is based on your state of residence, not where you have a vacation home, in which by definition you do not live most of the year. Further, it makes no sense to refer to "the state with no income tax", as there are many of those.

Granted, there are some working-age people who buy a vacation home with the thought of moving into it permanently a decade or two into the future, but those plans entail a lot of uncertainty (health, closeness to family) and of course once they move, it is no longer a vacation home.

> as there are many of those.

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming do not have income taxes. Less than 20% isn't 'many' to me but I realize YMMV.

9 is "many" if you're using "THE state with no income tax" as a singular noun.

Or you spend 6 months + 1 day in your 0 tax state (possibly with some creative accounting) and the rest in high income tax state.

> Or you spend 6 months + 1 day in your 0 tax state (possibly with some creative accounting) and the rest in high income tax state

This just protects your 6 months and 1 day. The other 182 days will likely be subject to tax by the high-tax state.

When they retire, they sell their house in the place with the job and move full time to the no tax state.

So, no income tax right when you have less income?

But when you have less money, every dollar counts. The income tax in places like Cali or NYS can be huge because it eats into the disposable income. It could easy cut your disposable income in half or maybe eat it all.

It has been my observation that no-income-tax states make up for it in sales tax and/or property tax. Government is getting its cut one way or another. Of course, retirees will want to skip CA altogether with their income tax and ridiculous sales tax.

As you sort of allude to, YMMV. I moved from California to Nevada and literally all taxation went down.

Income tax from progressive scheme nearing 10% to 0%

Sales tax from ~9% to ~8%

Property taxes are hard to pin to a single value, but with housing prices just being lower in general you wind up paying less for similar footage/amenities

While it doesn't mean the observation is fundamentally inaccurate, it's worth keeping in mind that people looking at states with 0% income tax may be coming from a place where they're just getting reamed because work wants them there. If you're not flying under the SALT cap and work is remote friendly it's worth at least looking around.

One good measure is tax take as a fraction of state GDP [1].

[1] https://www.sciotoanalysis.com/news/2024/6/25/how-do-state-t...

What does that have to do with vacation homes?

> The largest generation in US history is retiring and buying property in the state with no income tax.

Millenials are retiring already?

And a corresponding level of services.

This is not even logical, retired people don't have incomes. Anyways, they get them with insane property taxes.

Not quite. Retired people have deferred income in IRAs and 401(k)s that can be claimed at their leisure after 59.5 years old. So if you deferred taxes from a high tax State and then get the income in a no-tax State, you saved on taxes.

True but generally this is lower than their W-2 was.

The point is that you finally have control of where are when you realize the income.

Florida's property tax rate on average, according to Google is 0.79%. Average home price is $411,000, for property taxes of $3,200 per year.

That doesn't seem insane compared to say California with 0.71%?

Depends on what you mean by retired. In the traditional sense you’re correct, retired people don’t have income. In the legal sense retirement just means the person is of age to collect benefits. But there is also the question of type of income.

If a retired person owns property and sells it, that is income subject to capital gains tax.

If a person is retired but still owns the business or is even still a board member, they’re still working in a sense and gaining shares.

There are plenty of “retired” people who are “working” and have income.

Or at least not much income. But they still probably have dividends/interest. May well have annuities of various kinds. Probably not much W-2 income but probably some material cash-flow, especially if they have a vacation home.

New York state has a number of exemptions for property tax for seniors (65+), which seems like a better mechanism than California's prop 13.

Income from Social Security benefits and 401(k)s are taxable.

Depends how much money you retired with. When the ratio of your net worth to the cost of a house is high enough, property taxes are trivial. Let's say you have $50 million and you earn 7% a year on that. That's $3.5 million a year. Well worth it to live in FL to save the $350K you would lose every year in NY / CA.

Anything that involves living in FL isn't really worth it :P

Yes, yes - terrible place. Horrible beaches, rivers, etc. Too many snakes, gators and mosquitoes. And we're all full.

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