What Is The Cost Of Living In Idaho Vs. Washington State?

Cost of living is one of the major factors that people use to determine whether they want to live in one location versus another. When it comes to Idaho vs. Washington State, both states have much to offer potential residents.

While Idaho has a rapidly expanding tech scene, a strong job market, and access to breathtaking national parks, Washington State offers numerous employment opportunities, both large cities and small towns, and an abundance of outdoor recreation. But, how do these two states stack up in terms of 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). Washington State, on the other hand, has a cost of living index of 118.7, 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 Washington State is $504,200 – about 26% higher than Idaho.

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

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 Washington State. With Washington’s median home price of around $504,000, you’ll spend about 26% more for home in Washington than Idaho. However, buying a home in both states will still cost you well above the national average.

In the previous decade, the trend was towards moving to major coastal cities like San Francisco, New York, Seattle, 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 Western and Midwestern regions of the country. Idaho is one such place where this trend is occurring. The state has one of the top housing markets in the country and transplants are flocking to Idaho from all over to enjoy the affordable cost of living.

As a result of the pandemic allowing more people to work from home, those who reside in Washington state started to move away from metro areas of the state. This is still happening in 2021, as many desire more affordable living.

For this reason, it is currently a seller’s market in Washington State and most are looking for homes in more rural locations like Sultan, Snohomish, Carnation, and Gold Bar. But, housing prices are still rising in these rural areas – Carnation saw an increase of 15% in median home prices and Snohomish saw a 10% increase.

While it may be a great time to sell a home in both Washington state and Idaho, it is very competitive and more expensive than normal for buyers. Although home prices are up in Idaho, housing costs are still about 31% more affordable in Idaho than Washington.

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

Though, there are cities in Idaho that are experiencing a substantial 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 any time soon. In a world where rental prices are going up everywhere, Boise certainly stands out.

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

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

Taxpayers in Washington state, however, enjoy one of the most tax-friendly situations in the country – Washington has no personal income tax. This means that whether you’re a real estate mogul, teacher, lawyer, or dog-walker, you do not have to pay taxes on your earnings in Washington State. Over the years, the idea to authorize a state income tax in Washington has be proposed and even presented on the ballot, but no measures have passed.

At a base rate of 6%, the sales tax in Idaho is somewhat 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.

While Washington State may not have a state income tax, they do have high sales taxes. The base tax rate in Washington is 6.5%, but with all the extra city and county sales taxes rates, the total sales tax you pay could be higher than 10%.

Like the sales tax, property taxes in Idaho are also low when compared to the rest of the U.S. Idaho homeowners pay an average of 0.63% of their home market values in property taxes annually. This equates to a total of roughly $1,616 per year, on average. 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.

Washington State’s effective property tax rates usually sit around 1%. At the county level, effective rates range from as low as 0.61% in San Juan County to as high as 1.19% in Pierce County. Since home values in Washington are high, this equites to a statewide effective property tax rate of only 0.93%. Though, this is lower than the national average of 1.07%.

Whether you decide to live in Idaho or Washington, transportation costs are something that you’ll need to consider when calculating the overall cost of living in either state. Unlike Washington, the public transportation system all across Idaho is limited.

In addition to public transportation costs, additional transportation expenses include gas prices and vehicle purchase prices. Fortunately, with Idaho’s transportation cost index of 81.6 and Washington State’s transportation cost index of 113.6, these expenses are much more affordable in Idaho.