The Quick Version
- Weigh Georgia vs Tennessee vs Texas for retirees and the winner changes with every tax you measure.
- Tennessee and Texas skip income tax entirely. Georgia charges 4.99%, yet most people past 65 owe nothing.
- Property tax actually paid: Tennessee 0.52% of value, Georgia 0.79%, Texas 1.40%.
- Sales tax: Georgia 7.56%, Texas 8.20%, Tennessee 9.61%, second highest nationally.
- May 2026 median sale price: Texas $356,100, Georgia $389,000, Tennessee $413,200.
- Last updated September 2026.
Tennessee and Texas take nothing from your retirement income. Georgia takes 4.99%. Most comparisons stop there, and that is why most of them are wrong. On a $500,000 house, the average Texas owner pays near $7,000 a year in property tax. The average Georgia owner pays about $3,950.
Below, the three meet on figures you can verify: statute and revenue-department rates, Census-based property tax burdens, and one month of sale prices measured identically in all three.
Which state taxes retirement income: Georgia, Tennessee, or Texas?
Two of the three do not. Tennessee’s Hall tax on interest and dividends died for tax years beginning January 1, 2021, and nothing replaced it. Texas goes further. A 2019 constitutional amendment forbids the legislature from taxing individual income at all.
Georgia does levy it, at a flat 4.99% for 2026. House Bill 463 cut the rate from 5.19% and backdated it to January 1. The headline is real. The bill most retirees pay is not.
Social Security is never taxed here. Beyond that, anyone 65 or older excludes up to $65,000 of other retirement income. Pensions, IRA and 401(k) withdrawals, interest, dividends, capital gains, rents, and up to $5,000 of wages all qualify. From 62 through 64 the ceiling is $35,000. It climbs to $70,000 in 2027.
Run it out. A married couple both past 65 shelters $130,000 before Georgia collects a dollar, and their Social Security sits outside that calculation entirely. The state publishes the retirement income exclusion rules in full.
What each state actually takes
One table, six rows. Sales tax rates are current to July 1, 2026. The property figures show what owners actually paid as a share of home value, drawn from 2024 Census survey data published this year. That vintage matters, and I return to it below.
| Measure | Georgia | Tennessee | Texas |
|---|---|---|---|
| Tax on retirement income | 4.99% flat, Social Security exempt, $65,000 per person excluded at 65+ | None | None |
| Property tax paid, share of home value | 0.79% | 0.52% (41st) | 1.40% (7th highest) |
| Combined state and local sales tax | 7.56% (18th) | 9.61% (2nd) | 8.20% (14th) |
| Groceries | Exempt from the 4% state rate; local tax applies | 4% state plus local up to 2.75% | Exempt |
| Estate or inheritance tax | None | None | None |
| Median sale price, May 2026 | $389,000 | $413,200 | $356,100 |
No state sweeps. Tennessee owns property tax. Texas owns purchase price and groceries. Georgia owns sales tax and, past 65, ties at zero on income. The national population-weighted average combined sales tax is 7.53%, which puts Georgia near typical and Tennessee two points above it.
What does a house cost in Georgia, Tennessee, and Texas?
Not what the reputations predict. Measured identically across all three, the median home sold in Tennessee for $413,200 in May 2026. Georgia came in at $389,000, Texas at $356,100. The state with no income tax and the lowest property tax is the priciest place to buy.
Annual movement was modest everywhere. The FHFA House Price Index for the second quarter of 2026 puts Georgia up 1.9% over the year, Texas 1.6% and Tennessee 2.6%. Redfin’s July 2026 read agrees on the order, with Tennessee fastest and Texas slowest. None is a market sprinting away from a buyer. The 16% spread between the three medians is narrower than the gap between two counties inside any one of them.
That is the part to carry. Statewide medians set an altitude, not a shopping list. Fannin County, Georgia posted an $815,000 single-family median in July 2026, against a $650,000 year-to-date figure. Days on market ran 90, with 10.9 months of supply.
The property tax trade nobody prices in
Take a couple, both 66. They buy at $500,000 and draw $110,000 a year, $50,000 of it Social Security. Apply each state’s rules.
Georgia subtracts the Social Security, then fits the remaining $60,000 under a $65,000 exclusion. Each spouse has one of their own. Income tax: zero. Tennessee and Texas reach zero too, since neither levies one at all.
Property tax is where they part. Run each state’s average rate against a $500,000 home and Georgia lands near $3,950, Tennessee near $2,600, Texas near $7,000. The two states without an income tax finish first and third.
Read those as state averages, not as anyone’s bill. The Texas figure in particular overstates this couple. It rests on 2024 data, which predates the exemptions Texas voters approved in November 2025. At 66 the couple qualifies for the $200,000 school exemption and the ceiling described below, which pulls the real number under the average. Georgia’s county senior exemptions can do the same to its figure.
The ranking survives that correction even so. Texas stays the most expensive of the three on property tax and Tennessee the cheapest, though the gap narrows. Only a county appraisal district can price your actual house.
Which state shields you from the increase?
All three cap or freeze something. Almost nobody asks who actually qualifies, and that is where they separate hard.
Georgia’s shield is the broadest. House Bill 581 holds the taxable value of a homestead to the rate of inflation. The HOME Act, signed in May 2026, strips out the local opt-out. From the 2027 tax year the cap binds every county, city and school district. No age test, no income test.
It reaches the home you live in, and not a second property.
Texas is generous but conditional. School districts must exempt $140,000 of homestead value, plus $60,000 more once you turn 65, for $200,000 in total. From that year the district cannot bill above the first qualifying year’s amount. Those exemption rules cover school taxes only, and a newcomer who has never filed has to apply.
Why Tennessee’s freeze reaches fewer retirees than its reputation suggests
The property tax freeze is a local option. Twenty-eight of Tennessee’s 95 counties have adopted it as of September 2026, along with 37 cities. It also carries an income test, and the statutory floor for tax year 2026 is $38,470.
Most adopting jurisdictions set their limit above that floor. Many land at $63,470, and Williamson County runs to $69,150, the highest in the state. The floor itself governs in only seven counties and two cities.
The statewide Property Tax Relief program is separate, and it reimburses rather than exempts. It calculates on the first $33,600 of market value. Against a $413,200 median home, that touches 8% of the house.
So the state with the lowest rate offers the narrowest protection against that rate rising. Roughly seven in ten of its counties have not adopted the freeze at all, and the statewide program reaches a sliver of a median home’s value.
Where the North Georgia mountains fit
I’m Thomas Echea, a Luxury Real Estate Advisor with the E+E Group at Compass. Most retirees I work with are weighing a Georgia mountain county against somewhere in Tennessee or Texas. The math above is why many of them stop here.
It is not a clean win. Fannin’s 10.9 months of supply is a slow market, which helps you buying and hurts you selling. Blue Ridge prices carry a resort premium the $389,000 state median hides. On healthcare, the Texas metros beat a rural county outright.
The deciding point is quieter. Georgia’s inflation cap protects a primary residence, so a retiree who moves and homesteads is covered. A cabin bought as a second home is not. I would rather say that before an offer than after a tax bill. The mechanics sit in how Georgia taxes retirees.
Georgia vs Tennessee vs Texas for retirees: the verdict
Modest income and an expensive house? Tennessee’s 0.52% is hard to argue with, provided you are not banking on a freeze you may not qualify for.
Lowest entry price, and past 65 when you buy? Texas’s $200,000 school exemption and its ceiling do real work against that 1.40%.
Georgia takes the household in the middle. That is the one drawing $60,000 to $130,000 of retirement income, which the state excludes almost entirely. It pays a property rate nearer Tennessee’s than Texas’s, under a cap indifferent to age and income.
That case is narrower than a listicle admits. For where inside the state, see the best places to retire in Georgia. Treat all of this as general information rather than tax advice, and confirm your figures with the county tax office and a preparer.
Frequently asked questions
Is Georgia or Tennessee better for retirees?
Tennessee wins on property tax, 0.52% of home value against Georgia’s 0.79%. Georgia wins nearly everything else. Sales tax runs 7.56% against Tennessee’s 9.61%. Its May 2026 median sale price was $24,200 lower. Its homestead inflation cap carries no age or income test, while Tennessee’s freeze is a local option in 28 counties with an income limit starting at $38,470.
Which is a better state to live in, Georgia or Texas?
On tax, Georgia, for most retired households. Texas levies no income tax. But Georgia’s exclusion already zeroes the income tax for a couple past 65 drawing up to $130,000. Texas owners pay 1.40% of home value in property tax against Georgia’s 0.79%. Texas answers with a $200,000 school exemption at 65 and a lower median price.
Which state is cheaper to live in: Texas or Georgia?
Texas is cheaper to buy into. Georgia is cheaper to hold. Texas’s May 2026 median sale price was $356,100 against Georgia’s $389,000. Texas exempts groceries from sales tax entirely, while Georgia exempts them only from the 4% state portion. Georgia’s property tax burden is roughly 44% lower as a share of home value.
Is housing cheaper in Georgia or Tennessee?
Georgia, by $24,200 at the median. In May 2026 the median home sold for $389,000 in Georgia and $413,200 in Tennessee. Tennessee prices also rose faster over the year, 2.6% against Georgia’s 1.9% in the FHFA index for the second quarter of 2026. Both figures are statewide, and county spreads inside either state exceed the gap between them.
Does Georgia tax Social Security or retirement income?
Georgia never taxes Social Security. Other retirement income is taxable in principle at the 4.99% flat rate. But each taxpayer 65 or older excludes up to $65,000 of it, and $35,000 from age 62 through 64. That exclusion rises to $70,000 in 2027. Qualifying income includes pensions, IRA and 401(k) withdrawals, interest, dividends, capital gains, rents, and up to $5,000 of earned income.
Which state has the lowest property taxes: Georgia, Tennessee, or Texas?
Tennessee, at 0.52% of home value. Georgia follows at 0.79%, then Texas at 1.40%, seventh highest in the country. Those figures reflect what owners actually paid in 2024. They predate the larger Texas homestead exemptions voters approved in November 2025, so a Texas homeowner past 65 now pays less than 1.40% implies.
