Colorado taxes retirement income at 4.4% flat with a $24,000 per-person exemption. California taxes it higher. Property taxes in Colorado and California are surprisingly similar. Here is the full comparison.
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Talk to a Specialist →Colorado retirees moving to Sacramento face a moderate income tax increase — Colorado's 4.4% flat rate with a $24,000 per-person senior retirement income exemption compares reasonably to California's graduated rates. For a couple drawing $100,000 in retirement income, the Colorado tax is modest. California's tax on the same income is meaningfully higher. The comparison is nuanced and requires actual numbers rather than "Colorado is low tax, California is high tax" generalizations.
Colorado taxes retirement income at a flat 4.4% after a $24,000 per-person exemption for taxpayers 65+. For a married couple both over 65 drawing $100,000 in retirement income: $100,000 minus two exemptions ($48,000 total) = $52,000 taxable × 4.4% = $2,288/yr Colorado state tax. California on the same $100,000 (after standard deductions, approximately $85,000 taxable): at graduated rates averaging roughly 7% = $5,950/yr California state tax. Annual income tax increase: approximately $3,662/yr. The Colorado partial exemption meaningfully reduces the state tax burden for Colorado retirees — the gap with California is real but smaller than often assumed, particularly for couples with incomes under $100,000.
Colorado's effective residential property tax rate is approximately 0.48%–0.60% statewide — significantly lower than California. But Colorado does not have Prop 13. Assessed values in Colorado reset based on market value, meaning a Denver metro home that doubled in value since 2018 now carries a proportionally higher tax bill. Colorado's Gallagher Amendment (which capped residential assessment ratios) was repealed in 2020, allowing residential property taxes to increase with market values. Many Colorado homeowners have seen 30–50% property tax increases in 2021–2024. A Denver suburb home worth $750,000 at 0.55% effective rate = $4,125/yr. A comparable Placer County home at $650,000 at 1.12% = $7,280/yr. California is still higher — but the Prop 13 2% cap means California's advantage compounds over time. In year 10, the Colorado home's taxes may have grown more than the California home's under Prop 13 protection.
Denver metro homeowners who bought in 2012–2018 have seen extraordinary appreciation — median prices from $250,000 to $600,000+ in many submarkets. Selling a $750,000 Denver home purchased for $320,000 generates a $430,000 gain, much of which is sheltered by the $500,000 federal exclusion. Net proceeds after taxes and costs: approximately $680,000. Buying Sun City Lincoln Hills at $680,000 with a cash purchase eliminates mortgage costs entirely and leaves strong reserves. Colorado buyers with this profile are some of the most financially secure buyers in the Sacramento 55+ market and they often underestimate how far their equity reaches here.
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Colorado buyers in Sacramento concentrate in Placer County foothills communities — the elevation, terrain, and four-season climate most closely match what Colorado retirees value about their home state. Sun City Lincoln Hills attracts Denver metro buyers at mid-to-premium price points. Buyers from Boulder and the Front Range tech corridor often target Trilogy at Bickford and Heritage Placer Vineyards for the newer construction quality. Colorado Springs and Fort Collins buyers tend toward Sun City Roseville and Springfield at Whitney Oaks in the $450K–$600K range.
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