What Is The Cost Of Living In Colorado Vs. California? (Taxes, Housing & More)

Jessica Stone
by Jessica Stone

Cost of living is a major factor that people use to determine whether they want to live in one place versus another. When it comes to Colorado vs. California, both states have much to offer outdoor enthusiasts – with Colorado’s winter adventures and California’s excellent year-round weather. Residents in both California and Colorado are drawn to their unmatched beauty, which is unique in their own right. But, how do these two states stack up in terms of cost of living?

The cost of living index in Colorado is 121.1, meaning it’s about 21% more expensive to live in Colorado than the national average (100). California, on the other hand, has a cost of living index of 149.9, so it’s more expensive than Colorado but both states are still well above the national average. The median price of a home in Colorado is $488,600, which is about 68% higher than the national average of $291,700. Meanwhile, the median home price in California is $684,800 – about 40% more than Colorado.

Aside from median housing prices, let’s examine how the cost of living compares in Colorado vs. California.

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Housing Prices in Colorado vs. California

When you consider the fact the median home price in the state of Colorado is around 500,000, it is more affordable to purchase a home here than in California. In California, the median home price is nearly $700,000.

In May of this year, California’s median home price hit an all-time high and the state continues to be in an affordable housing crisis. As a result, many residents are heading to more rural locations from the major metropolitan areas to find cheaper homes. While bidding wars aren’t quite as intense as they used to be in California, homes are still seeing multiple bids. This is a direct result of increased demand, inflated asking prices, low supply, and record-low mortgage rates.

Like California, Colorado is experiencing a demand problem. With the state being such a desirable place to live, everyone wants to move there. This has caused Colorado to become one of the most expensive housing markets in the nation. During the COVID-19 pandemic, people flooded into Colorado at record rates and apartment-dwellers pursued more square footage. In Denver, the amount of money bid over the asking price is also experiencing record-high levels.

Home Prices in Colorado vs. California Comparison

Median home prices vary considerably across both Colorado and California, depending on the city and county that you settle in. The table below outlines some of the most popular cities in both states, along with their associated median home prices.

City Median Home Price
Los Angeles, CA$883,400
San Francisco, CA$1,471,200
San Diego, CA$812,100
Denver, CO$545,000
Colorado Springs, CO$427,900
Boulder, CO$850,000

Because of the booming economy and employment opportunities, Colorado has become one of the fastest growing states in the country. Combine these advantages with stunning scenery, an outdoor lifestyle, and affordable homes, it’s understandable why so many are moving to Colorado. While home prices in Colorado may be higher than other states, they are still between 35 and 40 percent cheaper than California.

Rent Prices in Colorado vs. California

Between 2019 and 2020, average rent increased in 39 states across the country and Colorado was one of them. In fact, Colorado comes in seventh on the list of states with the highest average rental prices in the nation, right behind New York State. The state’s average rent is $1,271, but rates vary based on where you live in Colorado.

With that said, the following table outlines the average rent for some of the various cities in the state of Colorado:

City Average Rent
Denver, CO$1,824
Colorado Springs, CO$1,458
Aurora, CO$1,563
Boulder, CO$2,171
Lakewood, CO$1,710
Fort Collins, CO$1,706

Like Colorado, California rental prices vary based on the specific city that you live in. However, there are cities in California – like Los Angeles and San Francisco – that have some of the highest rental prices in the nation. To help put things in perspective, the following table highlights the average rent for some of the most popular cities in California:

City Average Rent
Los Angeles$2,518
San Francisco$3,102
San Diego$2,433
Long Beach$2,333
Santa Clarita$2,306
San Bernardino$1,575

Food Prices in Colorado vs. California

Food and grocery price index are another factor that influences the cost of living. If you chose to live in Colorado over California, you’re looking at spending about three to four percent less on groceries.

California’s grocery cost index is only slightly higher than the national average of 100 – sitting at approximately 105.1. Colorado’s grocery index, on the other hand, is essentially on par with the national average at 100.7. Refer to the following table for a more comprehensive comparison of the average prices for a variety of food items in Colorado vs. California:

Food ItemColoradoCalifornia
Bread (one loaf)$2.77$3.30
Gallon of milk$3.14$3.74
Dozen eggs$2.42$3.09
Local cheese (8 oz)$5.92$6.58
Boneless chicken breast (1 lb.)$4.97$4.75
Apples (1 lb.)$2.28$1.99
Tomatoes (1 lb.)$1.72$2.08
Bananas (1 lb.)$0.80$0.83

Taxes in Colorado vs. California

There are some distinct differences between the taxes in Colorado versus the taxes in California, highlighted in detail below.

State Income Tax

Colorado boasts one of the lowest income tax rates in the nation. Unlike California, Colorado has a flat income tax. This means that, regardless of your income level, you’ll pay a flat rate of 4.63%. Eight other states in the country have a flat income tax rate, and Colorado is considered to be in the middle of the pack.

California, however, has what’s known as a progressive income tax. This means that the rate is lower for lower earners and higher for higher earners. California has a total of 10 official income brackets that range from as low as 1% to as high as 13.3%. The state’s top marginal rate is the highest in the country, but it only applies to those that make over $1 million of taxable income.

Sales Tax

While most states charge a sales tax for goods and services, California has an entirely different approach. At 7.25%, the minimum sales tax in California is one of the highest in the country. However, some counties and cities across the state have even higher rates. In fact, less than half the cities in California actually have a sales tax of 7.25%. For instance, Los Angeles County has a sales tax of 9.5%, but neighboring Culver City has a sales tax of 10.25%.

Among states that have a sales tax, Colorado is the lowest in the country – at just 2.9%. Though, like California, because of the numerous extra city and county sales taxes, actual combined rates may be as much as 11.2%. For example, Boulder County’s sales tax rate is almost 5% and San Juan County is 9.4%.

Property Tax

Fortunately, Colorado has one of the lowest property taxes in the nation. The average effective rate in Colorado is just 0.49% and in some areas, the property taxes are even lower. For example, Colorado’s Gilpin County has a property tax rate of just 0.23%. Meanwhile, California’s maximum allowable property tax rate is 1% of the home’s assessed value and the average effective rate is 0.73%.

Proposition 13, passed in 1978, also limits increases on assessed value to 2% each year, unless the home has undergone construction or changed ownership. This law has helped to keep property tax payments in California below the national average, and in some cases, this is pretty significant.

Taxes in Colorado vs. California Comparison

StateIncome TaxSales TaxProperty Tax
Colorado4.3%2.90% – 11.20%0.49% (average effective rate)
California1% – 13.3%7.25% – 10.50%0.73% (average effective rate)

Transportation Costs in Colorado vs. California

While public transportation is reliable in both Colorado and California, things are so spread out and having a car makes getting around much easier. Of course, this will add to higher transportation costs. The transportation cost index in California is 133.1, quite a bit higher than Colorado’s index of 106.7.

Cost FactorColoradoCalifornia
Gallon of gas$2.54$3.48
Monthly public transit pass$78.47$67.11
Taxi trip in downtown (approx. five miles)$19.82$17.42
New Volkswagen Golf$24,614$23,327

Based on the table above, although Colorado has lower gas prices, public transportation seems to be more expensive than California.

Income & Economy in Colorado vs. California

Median household income in Colorado is $59,488, about 3% lower than California and 11% higher than the national average. While residents in both states earn more than the national average, California residents have slightly higher incomes than those in Colorado. Though, California has a much higher unemployment rate than Colorado.

The unemployment rate in California is 8.2% and the unemployment rate in Colorado is 6.5%. Both rates are higher than the national average of 6.0%

Entertainment & Miscellaneous Costs in Colorado vs. California

Cost FactorAverage Price in ColoradoAverage Price in California
Monthly local gym membership$56.64$47.20
Movie ticket$11.42$12.93
Pack of cigarettes$7.02$9.22
Domestic beer (1 pint)$4.64$5.83
Cappuccino (mid-range area)$4.55$4.39
Pair of running shoes$77.56$77.14
Fast food combo meal$8.41$8.29

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Colorado vs. California: Which is More Expensive?

Living in Colorado or California is comparatively more expensive when you consider the national cost of living index of 100. However, when you stack these two states against each other, it is about 24% more expensive to live in California than Colorado. A large majority of the cost savings in Colorado comes from the more affordable housing, with Colorado being about 16% more inexpensive.

While transportation and childcare tend to rank more expensive in Colorado, groceries, food, entertainment, and pretty much everything else is cheaper in Colorado than California.

Jessica Stone
Jessica Stone

Jessica considers herself a home improvement and design enthusiast. She grew up surrounded by constant home improvement projects and owes most of what she knows to helping her dad renovate her childhood home. Being a Los Angeles resident, Jessica spends a lot of her time looking for her next DIY project and sharing her love for home design.

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