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

Despite its brilliant coastline, great employment opportunities, favorable climate, and liberal views, California is known for being an expensive place to live. For this reason, many are choosing to migrate to Idaho from California because of the state’s cheap cost of living and lower population density. With a population growth of about 2.2% in 2021 alone, Idaho is the fastest-growing state in the U.S. People from all over the country are being drawn to Idaho for its strong job market, affordability, and rapidly expanding tech scene. But, how does Idaho and California stack up when it comes to cost of living?

The cost of living index in Idaho is 97.7, meaning it is about 2.4% more affordable to live in Idaho 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 Idaho and the national average. Idaho’s median home price is $398,900, which is about 27% more expensive than the national average of $291,700. Meanwhile, the median home price in California is $684,800 – about 72% higher than Idaho.

Aside from median housing prices, let’s take a look at how the cost of living compares in Idaho vs. California.

When you evaluate the fact that the median home price in Idaho is $398,900, it is much more affordable to buy a home here than in California. In some cases, you may pay double the price for a home in California with the state’s median home price of nearly 700,000. However, purchasing a home in both states will cost you well above the national average.

In the previous decade, the trend was towards moving to major coastal cities such as San Francisco, New York, and Los Angeles. While these places are still very popular, more people are saying goodbye to life in the big city in favor of more affordable and less crowded places in the Midwest and Western regions of the country. Idaho is one such place where this trend is most obvious. The state has one of the top housing markets in the country and transplants are flocking to Idaho to enjoy the affordable cost of living.

Since the beginning of the COVID-19 pandemic, real estate values have surged by nearly 25 percent across the country. While it may be a great time to sell a home in both Idaho and California, it is very competitive and more expensive than normal for buyers. While California has been going through an affordable housing crisis for decades, the pandemic made the situation even more dire. This has caused more and more Californians to leave the state in search of cheaper housing, with many heading to Idaho.

There are about twenty-one states in the country with average rental rents under $1,000 a month. With an average monthly rent of $853, Idaho has the eighteenth lowest rate in the country. States that have low rental rates also usually have lower costs of living, and this is certainly the case for Idaho.

Though, there are places in Idaho that are experiencing a significant increase in rent. In 2020, Boise earned the nation’s top spot in terms of rent increases and there’s no sign of the market cooling off. In a world where rental prices are going up everywhere, Boise stands out.

With that said, refer to the following table for the average rent in some of the various cities across the state of Idaho:

Idaho has a progressive state income tax system, which means your rate depends on how much you make. There are seven total income tax brackets in Idaho, with marginal rates starting at 1.125% and reaching 6.925% for the state’s earners in the top bracket. Although the bottom rate is low, Idaho’s top marginal rate is considered high on average.

Like Idaho, California also has a progressive state income tax. There are ten income tax brackets in California, ranging from 1% and increasing to 13.3% for the state’s highest income earners. This top marginal rate is the highest in the country, but only pertains to Californians that earn more than $1 million in taxable income.

At 6%, the sales tax in Idaho is relatively low. In most cases, this is the rate you will be charged throughout the entire state. However, there are 14 resort cities and three auditorium districts that charge an additional local sales tax. These are typically referred to as “local option taxes,” as the cities that have them can determine which purchases are subject to the tax and at what rate. For example, these cities commonly charge an extra tax on restaurant and food, lodging, and alcohol purchases.

California has one of the highest minimum sales tax rates in the U.S., at 7.25%. Though, most cities in California have much higher taxes because of the numerous additional city and county sales taxes. In some locations – like Glendale, California – you may pay as much as 10.5% in sales tax.

Like the sales tax in Idaho, property taxes are also low when compared to the rest of the country. Idaho homeowners pay an average of 0.63% of their home values in property taxes every year. This equates to a total of roughly $1,616 annually. Although property taxes are based on the market value of a home, some homeowners may be eligible for an exemption of up to $100,000.

Because of Proposition 13, passed in 1978, California has a maximum allowable property tax rate of 1% of the home’s assessed value. The state’s average effective rate is 0.73%, which is more than Idaho but still quite a bit less than the national average of 1.07%.

Whether you decide to live in Idaho or California, transportation costs are something that you’ll need to consider when calculating the cost of living in either state. Unlike California, the public transportation system all across Idaho is limited. In Boise there is a bus system that has reasonable rates but inadequate valley-wide service. Though, there is a transit system – known as The Valley Regional Transit System – that is frequented by University students and downtown office professionals alike.

In addition to public transportation costs, additional transportation expenses include gas prices and vehicle purchase prices. Fortunately, the transportation costs in Idaho are more affordable than California and also below the national average.

When you consider cost of living index, Idaho is pretty on par with the national average and California almost 50% higher than the national average. When you compare these two states together, it is about over 50% more expensive to live in California than Idaho. The cost savings in Idaho is mostly contributed to more affordable housing, with some homes costing nearly half the price in Idaho compared to California.

However, in addition to housing, utilities, transportation, childcare, food and grocery costs, and pretty much every other expense is more affordable in Idaho than California.