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Talk to a Specialist →Washington has no state income tax. Arizona charges a flat 2.5% on all income including retirement distributions. There is no way to frame this as a tax savings. On $100K of retirement income: $0 in Washington → $2,500 in Arizona. On $150K: $0 → $3,750.
Property taxes are roughly equivalent: Washington averages about 0.87%, Pima County averages 0.85%. On a $400K home: $3,480 in WA vs $3,400 in AZ. Savings: $80/year. Negligible.
Washington enacted a 7% tax on capital gains exceeding $270,000 (annual threshold, subject to adjustment). If you’re selling a home with $270K+ in gains beyond the federal exclusion, or liquidating a concentrated stock position, Washington’s capital gains tax may apply. Arizona has no separate capital gains tax — gains are taxed at the flat 2.5% income rate. For retirees with significant unrealized gains, the timing of your move relative to asset sales matters. Consult a CPA who understands both states’ rules before making large transactions.
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It’s not about taxes. It’s about three things:
| Washington Home | After Selling (~7%) | Tucson $400K | Equity |
|---|---|---|---|
| $550K (Tacoma/Olympia) | $511K | $400K | +$111K |
| $750K (Eastside/Bellevue) | $697K | $400K | +$297K |
| $950K (Seattle proper) | $883K | $400K | +$483K |
Seattle-area sellers extract $200K–$500K. At 4% withdrawal, $300K generates $12,000/year in retirement income. That more than offsets the $2,500 income tax.
Seattle averages 150 sunny days/year. Tucson averages 300+. For retirees with seasonal affective disorder, joint pain that worsens in dampness, or simply a preference for blue sky, Tucson’s climate is the primary draw.
Seattle’s cost of living (groceries, dining, services, healthcare) runs 15–25% above Tucson’s. That daily savings accumulates faster than the $2,500 annual tax increase.
Washington buyers — especially from the Seattle metro — value outdoor access, environmental consciousness, intellectual community, and quality food. Del Webb at Dove Mountain’s Tortolita Mountain setting appeals to PNW outdoor aesthetics. Green Valley’s birding and hiking clubs attract nature-oriented WA retirees specifically. Sun City Oro Valley’s proximity to the University of Arizona’s cultural ecosystem appeals to the education-oriented Seattle demographic.
We’ll build the honest equity + tax + cost-of-living comparison for your situation.
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