New Jersey has the highest property taxes in the country. Connecticut and New York aren't far behind. All three tax retirement income. The Texas income tax advantage is real — but San Antonio's property taxes are higher than most buyers expect compared to what they're leaving. The net is still favorable for most. Here's why.
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Talk to a Specialist →New Jersey taxes retirement income with a partial exclusion: retirees with income under $100,000 can exclude up to $75,000 (joint) or $50,000 (single) of pension/retirement income. Income above those thresholds loses the exclusion. NJ taxes Social Security only if federal AGI exceeds $100,000. For retirees with moderate income, NJ's income tax exposure is real but manageable. For higher-income retirees, it's substantial — top NJ rate is 10.75%.
Property tax: New Jersey is the highest-property-tax state in the country. Median effective rate ~2.2–2.5%. A $500,000 NJ home pays $11,000–$12,500/year in property taxes.
Connecticut taxes retirement income partially. Pension and retirement income is taxable, but filers with AGI under $75,000 (single) or $100,000 (joint) can exclude 100% of qualifying pension income. Above those thresholds, the exclusion phases out. Social Security is taxable above $75,000 AGI. CT's top rate is 6.99%.
Property tax: Connecticut median effective rate ~1.6–2.1%, varying significantly by town. Hartford, Bridgeport, and New Haven areas carry higher rates; suburban towns in Fairfield County can be higher still.
New York has a relatively generous retirement income exclusion: up to $20,000 of pension income is exempt. Government pensions (federal, NY state, and local pensions) are fully exempt. Social Security is exempt at state level. Private pensions and IRA/401(k) distributions above $20,000 are taxable — at rates up to 10.9% at the highest brackets. For middle-income retirees drawing primarily from IRAs, NY income tax is real.
Property tax: New York statewide median ~1.4–1.8%. NYC itself is lower due to valuation caps. Westchester, Nassau, and Suffolk counties run 1.8–2.5%+.
| Category | New Jersey $500K home, $90K income | Connecticut $450K home, $90K income | New York (suburbs) $500K home, $90K income | San Antonio Bexar $500K home, 65+ |
|---|---|---|---|---|
| Annual property tax | ~$11,500/year | ~$8,100/year | ~$9,000/year | ~$8,500/year (with exemptions) |
| State income tax (retirement income) | ~$2,500–$5,000/year | ~$2,000–$4,500/year | ~$2,000–$3,500/year | $0 |
| Total annual tax burden | ~$14,000–$16,500 | ~$10,100–$12,600 | ~$11,000–$12,500 | ~$8,500 |
| Annual SA advantage | $5,500–$8,000/year | $1,600–$4,100/year | $2,500–$4,000/year | — |
Texas wins clearly against New Jersey — the combination of NJ's near-highest property taxes in the country and real income tax exposure creates a significant burden that Texas doesn't have. Against Connecticut and New York, the advantage is real but more moderate.
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Northeast retirees often arrive in Texas expecting a dramatic property tax reduction. They're used to hearing that Texas has "no income tax" and assume that means all taxes are low. They're surprised.
Bexar County's effective rate is 1.8–2.3%. With 2025 senior exemptions, a 65+ buyer's effective rate on a $500,000 home is approximately 1.7%. New York suburbs run 1.4–1.8%. Connecticut varies by town. New Jersey is genuinely much higher — but Connecticut and New York comparisons are much narrower than marketing implies.
The Texas advantage vs. New England comes primarily from income tax elimination, not property tax reduction. For retirees with significant retirement income, this matters. For retirees drawing primarily from Social Security (which New York and Connecticut exempt at lower income levels), the advantage may be smaller than expected.
For Northeast retirees with significant home equity, the most dramatic financial change isn't the tax calculation — it's what they can buy with the proceeds of a home sale.
A $700,000 Connecticut home sale generates capital gains, pays down debt, and potentially funds a $400,000–$500,000 San Antonio purchase outright. The lifestyle available for $450,000 in the San Antonio 55+ market — Hill Country Retreat resort amenities, lock-and-leave maintenance, professional programming — is categorically different from what $450,000 buys in Fairfield County or Westchester.
This housing cost arbitrage is often the primary financial driver of Northeast-to-Texas moves, and it's underrepresented in the "tax comparison" discourse.
Northeast retirees who visit San Antonio need honest preparation for some differences:
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