Retiring in Florida: The Income Tax Is Zero. The Insurance Is Not.

Florida is the state people move to in retirement, and the reason is usually stated in four words: no state income tax.

That part is true, and it is more durable than most people realise — it is written into the state constitution rather than into a statute a future legislature could repeal.

What almost nobody prices is the other side of the ledger. Florida has the highest average home insurance premium in the United States at $8,375 a year. On a fixed income that is not a footnote. It is larger than the state income tax bill most retirees were escaping.

A note before you start. This is general education, not tax advice. Every state figure here comes from this site's own fifty-state income-tax dataset and its retirement tax engine, computed for a single filer aged 70 unless stated otherwise; property tax, median home price and insurance figures come from the site's core state dataset. Rates are for tax year 2026. Insurance premiums in particular move fast in Florida, and a figure that is doing real work in your decision is worth confirming against an actual quote.

1. What Florida takes from retirement income

Nothing. Not on any stream, at any age, at any income.

Every one of those is $0 for the same structural reason, and it is worth understanding rather than memorising: Florida has no individual income tax at all, so it never draws the distinctions other states spend pages on. There is no exclusion amount to fall below, no age to reach, no income ceiling to phase out against, and no separate treatment for a government pension versus a private one.

That is unusual even among the no-income-tax states. Most states that exempt retirement income do it by carving exemptions into a tax that exists — which means conditions, thresholds and phase-outs. Florida has nothing to carve.

2. Why the exemption is more durable than a statute

Article VII, Section 5(a) of the Florida Constitution prohibits an individual income tax on natural persons.

This matters more than it sounds. Most state tax advantages rest on statutes, and a statute is one legislative session away from changing — several states have cut, expanded or phased out retirement exemptions in the past three years alone. A constitutional bar requires a constitutional amendment.

So the planning question "will this still be true in fifteen years" has a better answer in Florida than almost anywhere else. For someone making a relocation decision in their sixties on a thirty-year horizon, that durability is worth something real, and it is rarely counted.

3. What a drawdown actually saves

The exemption is worth the most to the people with the largest pre-tax balances, because it applies to the whole withdrawal rather than to a capped exclusion.

A $100,000 IRA withdrawal costs roughly $9,300 in California state tax. In Florida it costs nothing.

That single figure is the reason Florida appears in so many withdrawal-sequencing plans. Someone converting a large traditional balance to Roth, or clearing an inherited IRA inside its ten-year deadline, is doing it against a state rate of zero rather than against a graduated schedule that climbs as the withdrawal grows.

On the ordinary retirement profile the saving is more modest. A single filer with $34,000 of Social Security and $61,000 of distributions pays around $2,800 in the median taxing state. That is the number to hold in mind for the next section — because it is what the housing costs have to be measured against.

4. The insurance figure that changes the arithmetic

Average home insurance in Florida: $8,375 a year.

That is the highest of any state, and the gap is not marginal:

Florida costs roughly five times Washington and more than nine times Hawaii. For a retiree whose income is fixed and whose largest asset is the house, this is the single most consequential number in the state — more than the income tax, and considerably more volatile.

Two things make it worse than a large number normally is. It rises independently of your income, so a fixed-income household absorbs the whole increase. And it is a condition of the mortgage if you have one, so it is not a cost you can choose to carry.

5. Property tax, and what the two come to together

Property tax is the more ordinary half of the story. Florida's effective rate is 0.78%, which on the state's $425,000 median home is about $3,315 a year — below the national middle, and well below New Jersey's $10,395 or Connecticut's $8,779.

Put the two together and the picture changes:

Against a typical state income tax saving of roughly $2,800. The insurance alone is three times the saving.

This is not an argument against retiring in Florida. It is an argument against deciding on the income tax line alone, which is how the decision is usually presented. The honest version is that Florida trades a certain, permanent income tax saving for a large and rising housing cost — and whether that trade is good depends almost entirely on the house you buy and where you buy it.

6. Against the states people actually leave

The move is almost never from nowhere. It is usually from the Northeast or the Midwest, so the honest comparison is against those states rather than against an average.

State income tax on the typical retirement profile, plus property tax and insurance on each state's own median home:

Read the total column, and read it carefully.

Florida is not cheaper than New York on these three lines. It is about $1,400 a year more expensive. The income tax saving is real, and the insurance more than eats it.

Against Ohio, Pennsylvania or Michigan, Florida is roughly twice the cost. A retiree moving south from any of those three for tax reasons is, on this measure, moving to a more expensive state.

Florida wins clearly against Connecticut, and lands roughly level with New Jersey and Massachusetts.

One large caveat, and it matters. Each row uses that state's own median home, and those differ a great deal — Ohio's is $245,500 and Florida's is $425,000. So this compares the typical house in each state, not the same house in each state. If you are moving from Ohio and buying a Florida home at Ohio's price point, your figures will be better than the table shows. If you are buying at the Florida median, the table is close to your experience.

The point is not that Florida is expensive. It is that the income tax line, which is the one every comparison leads with, is the smallest of the three for a Florida homeowner — and the one everybody ignores is the largest.

7. "No income tax" tells you almost nothing

Nine states charge no individual income tax. If that were the thing that decided the cost of retiring somewhere, those nine would cluster together. They do not — they span from first to forty-fifth.

The spread is $7,707, or 2.9 times, between states with an identical income tax rate of zero.

Wyoming and Florida are the same on the line everybody checks and $7,707 apart on the total. Whatever "no income tax" is worth, it is not what decides this.

Two different things drive the bottom of that table. New Hampshire is expensive because of property tax — 1.48%, the highest rate in the group, on a $574,200 median home. Florida is expensive because of insurance, at $8,375. Florida's property tax is actually LOW — 0.78%, cheaper than six of the nine — and it still finishes last, because one line is large enough to decide the whole table.

The useful reading is that "no income tax" is a category, not a recommendation. It tells you one line of three is zero. It tells you nothing about the other two, and for a homeowner those two are usually larger.

8. The homestead exemption and Save Our Homes

Two provisions materially reduce the property tax figure above for a permanent resident, and both are worth claiming deliberately rather than assuming.

The homestead exemption reduces the assessed value of a primary residence. It applies to a home you actually live in as your permanent residence, not to a second home or a rental, and it must be applied for.

Save Our Homes caps annual growth in assessed value for a homesteaded property. Its effect compounds: someone who has held the same Florida home for fifteen years may be assessed far below its market value, while a recent buyer next door is assessed at what they paid.

That produces a specific trap for people moving within Florida in retirement. Selling a long-held homesteaded property and buying another resets the assessment to the new purchase price, which can raise the tax bill sharply even on a similarly priced house. Portability provisions exist to carry some of the accumulated benefit across, and they are worth understanding before listing, not after.

9. What Florida does not exempt you from

The federal system, entirely. This is the most common misunderstanding about no-income-tax states, and it is worth stating plainly.

Required minimum distributions still apply. The amount is a federal calculation — your prior-year balance divided by an IRS life expectancy factor — and it is identical in all fifty states. Florida changes what the distribution costs you, not whether you must take it.

Social Security is still federally taxable. Whether part of your benefit enters your federal taxable income depends on provisional income, a federal calculation. Moving to Florida does not change it.

IRMAA still applies, with its two-year lag. A large conversion or distribution raises a Medicare premium two years later regardless of your address.

And capital gains are still federally taxed. Florida adds nothing on top — unlike Washington, the other populous no-income-tax state, which charges an excise on large individual long-term gains.

10. Establishing that you actually live here

The exemption is worth nothing until Florida is your domicile, and the state you left may disagree about when that happened.

This is the part of a retirement move that goes wrong most often, and it goes wrong quietly — usually two or three years later, in a letter from the state you thought you had left.

High-tax states audit departing residents, and some do it energetically. The question is not whether you own a Florida home; it is whether you have genuinely abandoned the old domicile. Days spent in each state, where you vote, where your cars are registered, where your doctors are, where your possessions are, and where you claim a homestead all bear on it.

Two things make Florida specifically attractive here. The homestead exemption is itself evidence of permanent residence, and Florida offers a declaration of domicile that can be filed to create a dated record. Neither is decisive on its own, and neither substitutes for actually moving.

The snowbird case is the dangerous one. Someone splitting the year between Florida and a northern state, keeping a home in both, is exactly the profile a residency audit is built to catch. If the plan depends on the tax saving, the days need counting from the first year, not reconstructed afterwards from memory.

11. Two things about Florida taxes that are widely misreported

Florida does levy a corporate income tax. Chapter 220 of the Florida Statutes imposes one on C corporations. It does not reach individuals, and it is the single most common source of confusion about whether Florida "has an income tax." If you own an S corporation or an LLC taxed as a pass-through, this is generally not your problem; if you own a C corporation, it is.

The intangible personal property tax is gone. Florida used to levy an annual tax on stocks, bonds and mutual fund holdings — effectively a wealth tax on investors, and a genuine consideration for a retiree with a large brokerage account. It was repealed effective 1 January 2007. Guidance describing it is nearly two decades obsolete, and it turns up in older retirement writing often enough to be worth naming. It was never an income tax in any event.

12. Who this state is actually best for

Someone drawing down a large pre-tax balance. The exemption scales with the withdrawal, so the bigger the balance, the more it is worth. This is the clearest case.

Someone with a large pension, particularly a government or military one. Many states that exempt Social Security still tax pension income, or exempt only part of it. Florida exempts all of it without condition.

Someone who will rent, or buy modestly. The insurance figure is attached to the house. A retiree who rents, or who buys a smaller or inland property, keeps the income tax saving without absorbing the full housing cost.

It is a worse fit than advertised for someone buying a large coastal home on a fixed income — which is, unhelpfully, the picture most Florida retirement marketing shows. The income tax saving is real and permanent. It is also, on that profile, comfortably smaller than the insurance.

13. What to check before you decide

Get an actual insurance quote on an actual address. The $8,375 state average conceals enormous variation — inland versus coastal, roof age, construction type, and flood zone each move it substantially. This is the one figure where a state average is close to useless for an individual decision, and the one most worth pricing before you commit.

Find out what the property is currently assessed at, and what it will be assessed at after you buy. A seller's tax bill under Save Our Homes tells you very little about yours.

Work out your own state saving rather than assuming the average. Someone with mostly Social Security income may be paying little state tax where they are now, in which case the move saves less than the headline implies. Someone with a large pension and large distributions may save far more.

And check what your current state does before assuming it is worse. Several states exempt retirement income almost as completely as Florida does, without the insurance.

Frequently asked questions

Does Florida tax Social Security? No. Nor could it — the state has no individual income tax and is constitutionally barred from imposing one on individuals. Your federal treatment of benefits is unaffected.

Does Florida tax 401(k) or IRA withdrawals? No, at any amount and any age. There is no exclusion cap, no age trigger and no income limit, because there is no tax for an exclusion to apply against.

What about pensions — private, government, or military? All exempt, and for the same reason. Florida draws none of the private-versus-public-versus-military distinctions most states draw, because it has no income tax in which to draw them.

Could Florida introduce an income tax later? Not by ordinary legislation. Article VII, Section 5(a) of the state constitution prohibits an individual income tax on natural persons, so it would take a constitutional amendment rather than a statute.

Is the insurance figure really that high? $8,375 is the state average and it is the highest in the country. Individual premiums vary enormously by location, roof age and construction, so treat the average as a reason to get a real quote rather than as your number.

Does the homestead exemption apply to me? Only to a permanent primary residence, and only if you apply. It does not apply to a second home or an investment property.

What is Save Our Homes? A cap on annual growth in the assessed value of a homesteaded property. Its benefit compounds over years of ownership, which is why a long-time owner and a recent buyer of identical houses can pay very different tax.

If I move within Florida, does my tax stay the same? Not necessarily. Selling a long-held homesteaded property resets the assessment to the new purchase price, which can raise the bill sharply. Portability provisions carry some of the accumulated benefit across; understand them before you list.

Do required minimum distributions change if I move here? No. The required amount is federal and identical in every state. What changes is that Florida takes nothing from it.

Does Florida have a corporate income tax? Yes, under Chapter 220 of the Florida Statutes. It reaches C corporations, not individuals, and it is the commonest reason people are told Florida "has an income tax." It does not affect retirement income.

What happened to the tax on stocks and bonds? Florida's intangible personal property tax was repealed effective 1 January 2007. Any guidance still describing it is close to twenty years out of date.

How do I prove Florida is my domicile? By genuinely making it one, and documenting it. Days in each state, voter registration, vehicle registration, where your doctors are, and a filed declaration of domicile all contribute. A homestead exemption is itself evidence. The state you left decides whether it is convinced, and some audit departing residents closely.

Is Florida the cheapest state to retire in? On income tax it is tied with eight other states at zero. On income tax plus property tax plus insurance it is not — it comes out above New York and roughly double Ohio, Pennsylvania and Michigan. The answer depends on the house more than on the state.

Would I really be worse off moving from Ohio? On those three lines, at each state's median home, yes — about $5,300 a year worse. But the comparison uses each state's own median, and Ohio's is $245,500 against Florida's $425,000. Buy in Florida at an Ohio price point and the arithmetic changes.

What to do next

Work out your own numbers rather than the averages. The two that matter most are what your current state actually charges you, and what insurance costs on a specific Florida address.

• Retirement state tax calculator — what any state charges on your income, cited per state
• RMD calculator — the distribution you must take, which no state changes
• Home insurance premium estimator — the figure that decides this
• The Relocation Tax Playbook — establishing domicile, and the states that contest it