New Jersey has the highest effective property tax rate in the United States. The Tax Foundation puts it at 1.88 percent of owner-occupied housing value. At WindRiver in Loudon County, Tennessee, the equivalent figure works out to roughly 0.44 percent.
On a $1 million home, that is about $18,800 a year in New Jersey against roughly $4,421 in Tennessee. Same house, same year, a difference of more than $14,000 before you touch income tax.
Then there is income tax, where New Jersey’s rates run up to 10.75 percent and Tennessee’s are zero.
This guide works through the whole picture with the math shown, including the one category where Tennessee costs you more. That part matters, because a comparison that only lists the wins is not a comparison.
Why Are People Leaving New Jersey?
The short answer is the combination rather than any single tax.
New Jersey pairs the nation’s highest effective property tax rate with a graduated income tax topping out at 10.75 percent, and it is one of only a handful of states that still levies an inheritance tax.
Housing compounds it. Redfin put New Jersey’s statewide median sale price at $563,000 in May 2026, and Zillow’s average home value for the state at about $585,000 as of June 2026. In North Jersey the numbers are considerably higher. Bergen County’s median sale price ran about $788,000 over the three months ending May 2026.
So a Bergen County household is paying a premium price for the house and then paying the highest property tax rate in the country on top of it, annually, forever.
What Is New Jersey’s Actual Income Tax Rate?
Lower than the number you have heard, and this is worth getting right.
New Jersey’s top rate of 10.75 percent applies only to income above $1,000,000. It is a marginal rate on the last dollars, not a rate on everything. Almost every article about leaving New Jersey quotes 10.75 percent as though it were the bill.
New Jersey uses two different schedules, and which one applies to you changes the number meaningfully.
Single filers have seven brackets: 1.4 percent up to $20,000, 1.75 percent to $35,000, 3.5 percent to $40,000, 5.525 percent to $75,000, 6.37 percent to $500,000, 8.97 percent to $1,000,000, and 10.75 percent above that.
Married couples filing jointly have eight, with an extra 2.45 percent band and wider thresholds throughout: 1.4 percent up to $20,000, 1.75 percent to $50,000, 2.45 percent to $70,000, 3.5 percent to $80,000, 5.525 percent to $150,000, 6.37 percent to $500,000, 8.97 percent to $1,000,000, then 10.75 percent.
That 6.37 percent band is where nearly everyone reading this actually sits. Computing directly from both schedules:
| Taxable income | NJ tax, married filing jointly | Effective rate | NJ tax, single filer | Effective rate | Tennessee |
|---|---|---|---|---|---|
| $150,000 | $5,513 | 3.68% | $7,429 | 4.95% | $0 |
| $200,000 | $8,698 | 4.35% | $10,614 | 5.31% | $0 |
| $500,000 | $27,808 | 5.56% | $29,724 | 5.94% | $0 |
A married couple pays about $1,900 a year less than a single filer at the same taxable income. The scenarios later in this guide use the joint figures, since that is the more common situation for households considering a move like this.
Tennessee levies no personal income tax on wages, salaries, pensions, 401(k) or IRA withdrawals, Social Security, dividends, or interest. The Hall tax on interest and dividends was fully repealed effective 2021, so investment income is untaxed at the state level too.
Five to six percent of income, every year, is a real number. It is just not eleven.
How Much Do Property Taxes Drop?
This is the largest and most reliable part of the difference, and it is where New Jersey is genuinely an outlier rather than merely expensive.
Tennessee calculates the bill in a way that looks alarming until you understand it. Rates are quoted per $100 of assessed value, and residential assessed value is only 25 percent of appraised value. At WindRiver the rate is $1.7683 per $100 of assessed value. That comes to about 0.44 percent of what the house is actually worth.
| Appraised value | New Jersey at 1.88% | WindRiver at ~0.44% | Annual difference |
|---|---|---|---|
| $500,000 | $9,400 | $2,210 | $7,190 |
| $1,000,000 | $18,800 | $4,421 | $14,379 |
| $1,500,000 | $28,200 | $6,631 | $21,569 |
| $2,100,000 | $39,480 | $9,284 | $30,196 |
Does Tennessee Cost More in Sales Tax?
Yes, and by more than most relocation comparisons admit.
Tennessee’s state sales tax rate is 7 percent, among the highest state rates in the nation. Counties add local option on top. The Tax Foundation puts Tennessee’s average combined state and local rate at 9.61 percent, which ranks among the five highest in the country.
New Jersey’s state rate is 6.625 percent, and its average combined rate is 6.60 percent.
So Tennessee runs about three percentage points higher on taxable purchases. On $60,000 a year of taxable spending that is roughly $1,800 more per year, or $18,000 over a decade.
That does not undo a $14,000 annual property tax saving. It does mean the honest figure is smaller than the headline, and Tennessee funds the absence of an income tax partly through what you buy. If you are a high earner, the trade is strongly in your favor. If you are living on modest fixed income and spending most of it, it is closer than you would think.
What About Estate and Inheritance Tax?
New Jersey repealed its estate tax effective January 1, 2018, but it kept its inheritance tax, and this catches families off guard because the two are different taxes.
The inheritance tax is paid by the person receiving the money, and the rate depends entirely on their relationship to the person who died. Spouses, civil union and domestic partners, children, stepchildren, grandchildren, parents and grandparents are Class A and pay nothing. Siblings and sons or daughters-in-law are Class C, with the first $25,000 exempt and rates from 11 to 16 percent above that. Nieces, nephews, cousins, friends and unrelated beneficiaries are Class D, with no exemption at all, taxed at 15 percent on the first $700,000 and 16 percent above. Charities and religious institutions are exempt.
A New Jersey resident leaving $200,000 to a nephew leaves that nephew a $30,000 tax bill.
Tennessee has neither an estate tax nor an inheritance tax. If your intended beneficiaries include anyone outside Class A, that difference is worth raising with your estate attorney.
What Does New Jersey’s Retirement Income Exclusion Change?
More than most comparisons acknowledge, and you should know about it before running your own numbers.
New Jersey offers a pension and retirement income exclusion for taxpayers aged 62 or older. It is capped, it is not universal, and eligibility depends on total gross income, with the benefit reducing and then disappearing as income rises. Published figures for the caps and thresholds vary between sources, which is itself a reason to check the primary one rather than an article.
The practical effect is that a New Jersey retiree living on a moderate pension may owe very little New Jersey income tax, which makes the relocation case for that household weaker than the headline rates suggest.
It also means the opposite at higher incomes. A household with $200,000 or more of income is generally past the thresholds where the exclusion applies, so it gets none of the relief and pays the full graduated rate. New Jersey’s retiree relief thins out exactly where higher-income households begin.
Both states exempt Social Security benefits from state income tax, so that is not a point of difference either way.
The exclusion rules are detailed and income-dependent. Confirm your own position with the New Jersey Division of Taxation or your accountant rather than working from any article, including this one.
What Is the New Jersey “Exit Tax”?
It is not a tax on leaving, despite the name, and the misunderstanding causes real anxiety.
When a departing or non-resident seller sells New Jersey real estate, the state requires a withholding at closing under N.J.S.A. 54A:8-9. It is a prepayment against estimated tax on the sale, not an additional levy. Your actual liability is determined when you file your return, and any excess withheld comes back. What it creates is a cash-flow problem at closing rather than a permanent cost.
How it applies to a specific sale depends on facts we cannot know from here. Raise it with your CPA before you list, not after.
What Does the 10-Year Picture Look Like?
These combine income tax, property tax and sales tax. They exclude the purchase price difference between houses, which is covered below, and federal tax, which does not change with your address.
All three assume married filing jointly. A single filer would see a slightly larger income tax difference.
Working professional: $200,000 taxable income, $1 million home, $60,000 annual taxable spending
| Category | New Jersey, 10 years | Tennessee, 10 years | Difference |
|---|---|---|---|
| State income tax | $86,975 | $0 | $86,975 |
| Property tax | $188,000 | $44,208 | $143,792 |
| Sales tax | $39,600 | $57,660 | ($18,060) |
| Net 10-year advantage | $212,708 |
Business owner or executive: $500,000 taxable income, $2.1 million home, $100,000 annual taxable spending
| Category | New Jersey, 10 years | Tennessee, 10 years | Difference |
|---|---|---|---|
| State income tax | $278,075 | $0 | $278,075 |
| Property tax | $394,800 | $92,836 | $301,964 |
| Sales tax | $66,000 | $96,100 | ($30,100) |
| Net 10-year advantage | $549,939 |
Retiree: $150,000 taxable income, $1 million home, $50,000 annual taxable spending
| Category | New Jersey, 10 years | Tennessee, 10 years | Difference |
|---|---|---|---|
| State income tax | $55,125 | $0 | $55,125 |
| Property tax | $188,000 | $44,208 | $143,792 |
| Sales tax | $33,000 | $48,050 | ($15,050) |
| Net 10-year advantage | $183,868 |
The retiree figure assumes the pension exclusion does not apply. If it does apply to your household, the income tax line shrinks and the property tax line does the work.
Notice what that third table is telling you. Even with income tax set aside entirely, the property tax difference alone is worth roughly $144,000 over a decade on a $1 million home. That is the part of this comparison that does not depend on how you earn your money.
What Does Your Money Buy in East Tennessee?
Less dramatic than the tax difference, and it depends heavily on which market you compare.
Against New Jersey’s statewide median of about $563,000, East Tennessee is cheaper but not by half. Zillow put Knoxville’s average home value near $377,000 as of mid-2026, and Loudon County, where WindRiver sits, at about $455,000. Waterfront and golf-course property here is a premium submarket, not a discount one.
Against Bergen County’s $788,000 median, the gap widens to roughly 40 percent.
The more useful comparison is not price but what the price includes. In North Jersey, $800,000 buys a well-located house on a modest lot. At WindRiver, homesites start around $200,000 and lakefront estates at $2.1 million, and what comes with the address is a gated community on 800 acres with about five miles of shoreline on 16,000-acre Tellico Lake.
Ongoing costs are worth knowing up front. The WindRiver Community Association assessment is $2,150 per year and the Club Social Membership for residents is $330 per month, with golf memberships priced separately.
What Do You Give Up?
Real things, and pretending otherwise would be insulting.
You give up Manhattan at forty minutes and Philadelphia at ninety. You give up the Jersey Shore. You give up a density of restaurants, delis, bagels and pizza that East Tennessee does not replicate and will not pretend to. You give up NJ Transit and the ability to reach two major cities without a car. If your children and grandchildren are in New Jersey, you give up proximity to them, and no tax table addresses that.
What you get instead is different rather than better: water at the front door, mountains within sight, and four seasons with mild winters that require very little snow management.
The climate adjustment coming from New Jersey is smaller than from a dry western state. Summer highs are broadly similar. Humidity is higher here and winters are considerably milder.
Why East Tennessee Specifically?
Access. From WindRiver in Lenoir City, McGhee Tyson Airport is about 15 minutes away and downtown Knoxville about 30. West Knoxville and the Turkey Creek corridor are 15 to 20 minutes out.
Water and land. Tellico Lake covers roughly 16,000 acres, fed by streams out of the Great Smoky Mountains. Lenoir City sits among three lakes and is known regionally as the Lake Capital of the South.
Healthcare. Fort Loudoun Medical Center is in Lenoir City, roughly 10 minutes away. The University of Tennessee Medical Center in Knoxville is a Level I trauma center about 30 minutes out. There is a fuller look at hospitals and specialists near WindRiver worth reading if this is a priority.
Amenities. WindRiver’s championship golf course was designed by Bob Cupp, a protégé of Jack Nicklaus, and is Tennessee’s first Audubon-certified course. The marina has 222 slips from 30 to 90 feet, covered and uncovered, with floating docks for year-round access, shore power and water at the dock, and a 24-hour fuel station. Citico’s sits lakefront at the Lakeside Inn. The Pool and Sports Complex covers pool, tennis, pickleball and basketball, and more than 30 miles of trails with 28 bridges connect into the East Lakeshore Trail System. Brightwater Park adds waterfront green space. Clubhouse Village, three levels overlooking the fairways and the lake with fine and casual dining, a spa and a fitness studio, opens in summer 2026.
Who lives here. About 80 percent of WindRiver owners are full time. The community is an active lifestyle community and is not age-restricted.
Building or buying. Homes and homesites are both available, in The Highlands, Navigator and elsewhere. If you build, you work with an approved builder from the Premier Builders group, with custom home and design support on site.
If you are still choosing between communities, the comparison of gated lakefront communities in Tennessee covers the realistic options around the lake, and ten reasons to consider East Tennessee is a fair starting point on the region. There is also a guide to Lenoir City, Knoxville and the Smokies for what surrounds it, and more on the case for Tennessee generally.
What Are the Practical Logistics?
The route is about 891 miles, roughly fourteen hours by car down I-81. Full-service movers for a two-to-three bedroom home run about $2,750 to $7,250 based on aggregated real quotes, with two to seven days in transit. Peak moving season runs roughly May through September, so autumn dates are usually easier to book and cheaper.
FAQ
Is Tennessee cheaper than New Jersey?
On property tax and income tax, substantially. On sales tax, no. Tennessee’s average combined sales tax rate of 9.61 percent is about three points higher than New Jersey’s 6.60 percent. The net effect strongly favors Tennessee, and more so the higher your income and home value.
Does New Jersey really have the highest property taxes in the country?
Yes. The Tax Foundation puts New Jersey’s effective rate on owner-occupied housing at 1.88 percent, the highest of any state.
What is New Jersey’s income tax rate?
It is graduated from 1.4 percent to 10.75 percent, across seven brackets for single filers and eight for married couples filing jointly. The 10.75 percent top rate applies only to income above $1,000,000. A married couple with $200,000 of taxable income pays roughly 4.4 percent effective; a single filer at the same income pays about 5.3 percent.
Does Tennessee tax retirement income?
No. Tennessee taxes no pensions, 401(k) or IRA withdrawals, Social Security, dividends or interest.
Is the New Jersey exit tax real?
It is a withholding requirement at closing rather than an extra tax. Your actual liability is settled on your tax return and excess withholding is refunded. It affects cash flow at closing. Discuss the specifics with your CPA.
Does New Jersey still have an estate tax?
No, it was repealed effective 2018. New Jersey does still have an inheritance tax, paid by beneficiaries, with rates depending on their relationship to the deceased. Tennessee has neither.
How much will I actually save?
It depends on income, home value and spending. On a $1 million home with $200,000 of joint taxable income, the combined ten-year difference works out around $213,000 in the illustration above. Run your own numbers with a professional.
Will the humidity bother me coming from New Jersey?
Less than it would coming from a dry climate. Summer highs are broadly comparable. East Tennessee is more humid and winters are much milder.
How far is WindRiver from an airport?
McGhee Tyson Airport is about 15 minutes away.
What are the mandatory ongoing costs at WindRiver?
The Community Association assessment is $2,150 per year and the Club Social Membership is $330 per month for residents. Golf membership is optional and priced separately.
Come See It
The financial case is arithmetic. Whether you want to live here is not, and that part requires standing on the ground.
A Discovery Tour is three days and two nights for $795 per couple. It includes nearby luxury accommodations, a $75 dinner credit at the Lakeside Inn, VIP access to community amenities, a round of golf for two on the Bob Cupp course, and a private tour of available homes and homesites.
Come in a month that is not October. Walk the marina, play the course, eat at Citico’s, and find someone who made this same move from Morris or Bergen or Monmouth County and ask what surprised them. That conversation is worth more than any table on this page.
Call 865-988-1864 or book a Discovery Tour to get started.
New Jersey’s property tax rate is the highest in the country and its income tax is among the highest in the Northeast. Tennessee has no income tax and roughly a quarter of New Jersey’s property tax rate, and it charges you more at the register in exchange. For most households leaving North Jersey, that trade is not close. What it buys you is not just money back. It is a lake, a course, and a different pace, and you should come look at it before you decide.
