Composite Index
110.7
US average = 100.0
Washington (WA) | Composite 110.7
Washington Cost of Living 2026
Washington sits at 110.7 on the 2026 C2ER cost of living index, roughly 11 percent above the US average. The state has no income tax but housing runs 30 percent above the national average and a 7 percent capital gains tax on high earners shifted the picture in 2022. Seattle metro drives the state composite up; eastern Washington (Spokane, Tri-Cities) tracks closer to the national average.
Composite 110.7No state income taxHousing index 130.2
Median Home
$568,500
2BR rent $1,780/mo
Median Income
$82,228
Household, Census ACS
Category breakdown
All 6 categories vs national average
| Category | WA index | National avg | Difference |
|---|---|---|---|
| Housing | 130.2 | 100.0 | 30.2% |
| Groceries | 103.5 | 100.0 | 3.5% |
| Utilities | 82.5 | 100.0 | -17.5% |
| Transportation | 112.8 | 100.0 | 12.8% |
| Healthcare | 102.5 | 100.0 | 2.5% |
| Miscellaneous | 106.5 | 100.0 | 6.5% |
Sources: BEA Regional Price Parities, C2ER Cost of Living Index, Census ACS 5-year (median income, home value), Washington Department of Revenue (sales, property and capital gains tax), EIA (electricity rates), KFF (uninsured rate), Zillow ZHVI.
Pros / offsets
What works in Washington.
No state income tax on wages. Washington is one of nine no-income-tax states. The Department of Revenue funds the state through sales tax (6.5 percent state plus local), property tax, and the Business and Occupation (B&O) gross-receipts tax. A net long-term capital gains tax of 7 percent was added in 2022 and applies above a roughly $270,000 threshold (indexed annually).
Cheap hydropower. Washington has the lowest average residential electricity rate in the US at 10.15 cents per kWh per EIA. The Columbia and Snake river dams produce roughly two thirds of the state generation. Average monthly electric bill is $98, well under the national average of around $140.
Strong wages. Median household income $82,228 is well above the US median. Seattle metro tech wages cluster with the Bay Area and Boston; BLS OEWS shows software-engineer median wages 35-50 percent above the national median.
No estate tax surprise. Washington does have an estate tax above a $2.193 million exemption, lower than the federal threshold, which catches more estates than most states. Retirees with substantial assets should plan for this. Income from retirement accounts is otherwise untaxed.
Cons / drivers
Where Washington costs more.
Housing premium concentrated in Seattle metro. Housing sub-index 130.2 statewide masks a Seattle MSA running closer to 175. Median home statewide $568,500; in Seattle proper the median runs $850,000-plus per Zillow ZHVI, and the Eastside (Bellevue, Redmond, Kirkland) routinely exceeds $1.2 million for single-family.
Sales tax stacks. 6.5 percent state plus local rates push combined sales tax to 10.0-10.5 percent in Seattle, Tacoma, and Bothell. Groceries are exempt; prepared food is taxed. This is a regressive offset to the no-income-tax structure: lower-income households pay a larger share of income in sales tax.
Capital gains tax on high earners. The 2022 net long-term capital gains tax (7 percent above the indexed threshold) primarily affects sales of stock and business interests. Real estate sales are exempt. A 2023 Washington Supreme Court ruling upheld the tax. For founders and senior tech employees with equity-heavy compensation, this can materially change relocation math.
Property tax higher than headline rate suggests. Effective property tax rate is 0.84 percent, mid-pack nationally, but the state ranks high in absolute dollar terms because of high home values. On the Seattle median home, the annual property tax often exceeds $7,000.
Tax + benefit signals
Washington tax and access overview
State income tax
0%
No state income tax
Property tax effective
0.84%
Of assessed value, annual
Sales tax (state)
6.50%
Local can add 1-4% more
Uninsured rate
5.8%
Medicaid: expanded
Metro variation
State averages mask city variation.
Washington state composite 110.7 averages dramatic regional variation:
Seattle / King County: Roughly 165-180 on the Regional Price Parity scale. Median home in central Seattle $850,000-plus; the Eastside (Bellevue, Redmond, Kirkland) routinely exceeds $1.2 million for single-family detached. Apartment List 2-bedroom median in Seattle metro $2,400-2,600.
Tacoma / Pierce County: Roughly 115-125. Substantially cheaper than Seattle but with similar sales-tax stack and commuter access to Seattle wages via the I-5 corridor and Sounder rail. Median home around $550,000.
Spokane: Roughly 95-100, near the national average. Median home around $400,000, growing fast in 2021-2024 as Seattle remote workers relocated east. Spokane is the largest city in the state east of the Cascades.
Tri-Cities (Kennewick, Pasco, Richland): Roughly 90-95. Strong Hanford site and agricultural-processing employment, low housing costs, and the cheapest electricity in the country. Median home around $420,000.
Vancouver, WA: Roughly 115-125. A no-income-tax border alternative to Portland; many residents work in Oregon (subject to Oregon income tax) but shop in Washington (subject to Washington sales tax). The cross-border arbitrage works best for people earning a Portland salary and consuming Vancouver housing.
For metro-level Regional Price Parities, the BEA publishes 384 MSAs. Washington's intra-state spread (Seattle at 175 to Tri-Cities at 90) is among the widest after California.
Frequently Asked
Washington cost of living, answered
Does Washington really have no state income tax?
On wage income, yes. The Washington State Constitution requires uniformity in taxation, which the state Supreme Court has historically read as prohibiting a graduated income tax on wages. The 2022 net long-term capital gains tax (7 percent above the indexed threshold, roughly $270,000 in 2026) is treated as an excise tax on the sale of capital assets, not an income tax, and survived 2023 court challenges. For wage earners, Washington remains income-tax-free.
Why is Washington electricity so cheap?
Hydropower. The federal Columbia River and Snake River dams (operated by the Bonneville Power Administration and US Army Corps of Engineers) produce roughly two thirds of Washington's electricity. The amortised capital cost of these dams was paid down decades ago, so the marginal cost to consumers is among the lowest in the country at 10.15 cents per kWh per EIA. The flip side is that drought years and salmon-protection flow restrictions can squeeze supply.
Is the Seattle housing premium worth it for the no-income-tax saving?
It depends on the salary. On a $200,000 wage in Seattle, no-income-tax saves roughly $12,000-15,000 per year vs Oregon or California. Set against the Seattle housing premium (median home $850,000+ vs Spokane $400,000), the saving is real but the housing differential more than offsets it for buyers. Renters who can find a deal benefit most; high earners with stock comp benefit until they sell and hit the 7 percent capital gains tax.
What is the Washington capital gains tax?
A 7 percent tax on net long-term capital gains above an indexed threshold (roughly $270,000 in 2026). It applies to gains on stocks, bonds, and business interests. Real estate sales are exempt. Retirement accounts (401(k), IRA, pension) are exempt. The tax was enacted in 2021, took effect in 2022, and was upheld by the Washington Supreme Court in March 2023. For founders selling a business or tech employees exercising and selling concentrated equity, this is a material consideration.
How does Vancouver, WA compare to Portland, OR for cost of living?
Vancouver, WA has Washington's no-wage-income-tax structure and Oregon's no-sales-tax option just across the I-5 bridge. Vancouver residents working in Portland pay Oregon income tax (the Multnomah County Preschool For All and Portland-area Metro Supportive Housing taxes also apply). Vancouver housing is roughly 15-25 percent cheaper than equivalent Portland neighborhoods. For a Portland-salaried household consuming Washington housing and Oregon retail, the arbitrage is well established but not as lucrative as the headline numbers suggest.
How does Washington compare to Oregon overall?
See our dedicated Oregon vs Washington comparison page. The headline: Washington composite 110.7 vs Oregon 113.1; Washington wins on income tax (zero vs 4.75-9.9 percent) but loses on sales tax (6.5+ percent state vs zero). For high earners, Washington is cheaper net. For retirees on fixed income with high spending, Oregon's no sales tax often offsets its income tax (most retirement income is partially or fully exempt).
Is Spokane really that much cheaper than Seattle?
Yes. Spokane housing runs 40-50 percent below Seattle; the regional price parity gap is roughly 75-80 points on the C2ER housing sub-index. Wages are also lower (Spokane median household income around $58,000 vs Seattle metro $103,000), so for someone earning a remote Seattle salary while living in Spokane, the arbitrage is substantial. For local wages, the difference is more modest.
What about the cost of living for retirees in Washington State?
Mixed picture. The no state income tax structure applies to all retirement income (Social Security, pensions, 401(k) distributions, traditional IRA distributions are all untaxed at state level). Property tax effective 0.84 percent is moderate; the state offers a senior citizen property tax exemption and deferral program for low-income seniors. Healthcare provider networks in Seattle (UW Medicine, Virginia Mason, Swedish Medical Center) are top-tier. The two drawbacks for retirees: the Washington estate tax kicks in above $2.193 million (lower than the federal threshold), catching more high-net-worth estates than most states, and the cost of living overall sits well above the US average. Many Washington retirees split time between Washington and a cheaper second-home state (Arizona, Nevada) to manage the tax-and-cost picture.