5 Most Tax-Friendly States for Retirees: Some with No Property Tax

3. Alaska

Insider Monkey Score: 51    

Combined State Sales Tax Rate: 1.821%    

Average Effective Property Tax Rate: 1.16%          

Tax Friendliness: Very Tax Friendly          

Cost of Living Index: 125.2

Alaska is number three on our list of most tax-friendly states to retire to. The state doesn’t have an individual income tax, which means all retirement income isn’t taxed at the state level. There is no estate or inheritance tax either. A qualified homeowner in the state aged 65 or above can avail an exemption of up to $150,000 of the assessed value of an owner-occupied home. This incentive is offered to residents who choose to live here permanently. However, living in Alaska may not be an ideal choice for seniors because of the harsh climate and high costs of living.