What Is The Cost Of Living In Georgia Vs. California?

If you’re thinking about swapping coasts, but don’t want to give up the favorable climate in California, Georgia may be the ideal place for you. While California has consistently been one of the most highly sought-after places to live in the U.S., Georgia remains one of the fastest-growing states in the country – and for good reason. With its excellent educational system, mild climate, job opportunities, affordable housing market, and numerous outdoor recreational opportunities, many view Georgia as a more advantageous place to settle down than California. But, how do these two states stack up when it comes to cost of living?

The cost of living index in Georgia is 93.4, meaning it is nearly 6% more affordable to live in Georgia than the national average (100). California, on the other hand, has a cost of living index of 149.9, so it is significantly more expensive than both Georgia and the national average. Georgia’s median home price is $240,400, which is about 18% cheaper than the national average of $291,700. Meanwhile, the median home price in California is $684,800 – a staggering 185% higher than Georgia.

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

When you consider the fact that the median home price in Georgia is around $240,500, it is substantially more cost-effective to purchase a home here than in California. In fact, you may end up spending over double the amount on a house in California, with California’s median home price approaching $700,000.

Currently, the housing market in the country is red hot and Georgia’s real estate market is no exception. Homes in Atlanta are up around 22% compared to last year, ready-to-go homes are receiving between two and three offers within the first few days on the market. The skyrocketing prices across Georgia has to do with the overwhelming demand for homes. It’s a classic supply and demand imbalance.

While it may be a great time to sell a home in Georgia, it’s pretty expensive and competitive for buyers. The situation is very similar in California, although the state has been going through an affordable housing crisis for decades and it was only exacerbated by the COVID-19 pandemic. In May of 2021, the median home price in California hit an all-time high. As a result, Californians are heading to more rural areas or leaving the state entirely to find cheaper housing situations.

From 2019 to 2020, the average rent decreased in 12 states in the country, and Georgia was one of them. During the most severe coronavirus outbreak in 2020, rental prices plunged in the state – especially in Atlanta. Rents were down about 2.2% for the entire metro Atlanta market from March to May, with the sharpest declines in Emory, Buckhead, Midtown, and Lindbergh. Georgia’s average rent is approximately $1,006, but the rent you will pay varies based on where you specifically live in the state.

With that said, take a look at the table below for the average rent in some of the various cities across the state of Georgia:

Georgia has a relatively simple progressive income tax system, with rates that range from as little as 1% to a top marginal rate of 5.75%. A progressive income tax means that you pay based on your income and there are higher rates for higher income earners. Georgia has six income brackets in total, but the brackets top out at only $7,000 for single filers. This means that the majority of full-time workers in the state will pay the top marginal rate of 5.75%.

Like Georgia, California also has a progressive state income tax system. The state has ten income brackets, ranging from 1% all the way up to 13.3% for the highest income earners. This top marginal rate is actually the highest in the country, but only applies to Californians that make over $1 in taxable income.

Among other states that also have a sales tax, Georgia has one of the lowest statewide sales taxes in the nation. Though, cities and counties across the state can assess their own local sales taxes. For example, Atlanta has a 1% city sales tax and counties can have their own taxes up to 4.90%. However, Atlanta is the only city with its own sales tax, but when combined with the state and county rates, the total sales tax in Atlanta is 8.90%.

California, on the other hand, has the highest base sales tax in the country – at 7.25%. This means that no matter where you are located in the state, you must pay an extra 7.25% of the purchase price on any taxable item. Like Georgia, cities and counties in California also enact their own sales taxes. The actual sales tax rate that is paid throughout much of the state is actually much higher than the base rate. For instance, Glendale is one of several cities that has the maximum sales tax rate of 10.50%.

The effective property tax rate in Georgia, or the amount homeowners pay as a percentage of their home value, is 0.87%. This is quite a bit less than the national average of 1.07%, but property taxes in Georgia vary based on the county. For example, the state’s most populous county – Fulton County – has an effective property tax rate of 1.00%.

At 0.73%, California also has an average effective property tax rate below the national average. California’s Proposition 13 was passed in 1978 and set the maximum allowable property tax rate at 1% of a home’s assessed value. It also limited the increase in assessed value to 2% each year. This law continues to help California property tax payments stay below the national average.

Whether you choose to settle in Georgia or California, transportation expenses are another factor that must be considered while determining cost of living. Unlike California, Georgia doesn’t have a metro rail system, but commuters still have plenty of ways to get around using public transportation. Amtrak trains make stops all around the state and at a more local level, there are numerous bus systems in various cities.

In addition to public transportation costs, other transportation expenses include gas prices, bus fares, transit passes, and vehicle purchase prices. Although transportation costs in Georgia are slightly above the national average, they are about 27% more affordable than California.

When you consider cost of living index, Georgia sits below the national average and California comes in well above the national average. However, when you compare these two states together, California is about 60% more expensive to live in than Georgia. The significant cost savings in Georgia is mostly attributed to the lower housing costs, which are about 18% below the national average. However, Georgians also enjoy cheaper food and grocery costs, childcare, transportation expenses, property taxes, rental rates, and so much more.