Since March, there have been endless reports of pandemic-inspired moves. As CNBC reports, we may be on the brink of “a great reshuffling” as people move away from cities to homes with more privacy and space to work from home. While moving to the suburbs may be appealing—particularly amid the pandemic—it could be more costly than you expect.
Pay attention to income taxes
While it may not be your top concern, you should consider income taxes. Before falling in love with your dream Zillow listing in the suburbs, do some research on how income taxes will impact your bottom line.
There’s a good state-by-state breakdown from the Tax Foundation here—including colors to see which places may charge the most. Temporary moves may also impact how much you owe.
Another thing to watch for: If you move from a high-tax state, some places—like California, Illinois, or New York, for example—may try to conduct a residency audit to prove you aren’t trying to dodge income taxes.
Research local income taxes
If you live in a place like New York City or Philadelphia, you may already be familiar with the sting of local income taxes. For everyone else, don’t forget to research how much you could pay for local income taxes—which could be higher than you expect.
Property and sales taxes could be more expensive
For those looking to buy a home, you should consider how much you will spend every year on property taxes. You can see how much you will pay by county—and how it compares to the rest of the country—in this Tax Foundation map.
You may also forget the cost of local sales taxes, which may impact the cost of everything you buy. You can also see a breakdown of the highest state and local sales taxes here.
Watch for higher utility bills
Paying more in the suburbs for electricity, water, or gas may catch some folks by surprise. If you’re moving from an apartment to a standalone home with more square footage, you could be spending a lot more on utilities every month.
Transportation may be costly
If your company hasn’t made the switch to remote work, you could spend a lot more on your daily commute. The average American could spend up to $5,000 per year on commuting—which may include gas, car maintenance, public transportation, and more.
Expect to pay more for groceries
Another costly surprise: You may spend more on groceries outside of the city. A 2015 study found suburban grocery trips may be more expensive because of the smaller food supply.