8 Secret Expenses When Relocating to a Different State
Written by
Angela Mae
Edited by
Jenna Klaverweiden
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Moving to another state can be exciting, but it also comes with certain expenses you need to be aware of. This includes not only common costs, like moving expenses, but also things like property taxes, state taxes and registration fees.
If you’re thinking about moving to another state, it’s important to be prepared for these expenses. By learning about them in advance, you can budget for them and ensure you’re ready for the big move when the time comes.
Here are eight secret expenses when relocating to a different state.
Homeowners Insurance
If you plan to buy a home, you’ll need to get homeowners insurance. While this isn’t unusual, the type of policy — and the coverage needed — might be.
“In the U.S., moving to a new state often means having to deal with the threat of different kinds of extreme weather,” said Seamus Nally, CEO of TurboTenant. This could include hurricanes, wildfires, tornadoes, earthquakes, flooding and more.
“A lot of the time, that means you will have to purchase specific insurance policies for those new weather risks, which is an additional cost many people don’t think about ahead of time,” Nally said.
The average cost of homeowners insurance is $2,601 a year. However, you could end up paying thousands of dollars more in certain areas due to the region’s requirements or environmental hazards.
State Taxes
Each state comes with its own taxes, so it’s good to know what your taxes are going to be before moving.
“It’s important to consider the difference in state tax rates,” said Cam Dowski, a real estate professional and CEO of WeBuyHousesChicago. “Some states have higher income or property taxes, which can impact your overall finances.”
And don’t forget about other taxes, like sales tax. Oregon, for example, doesn’t have sales tax, but most states do. Depending on the taxes, you could be spending more money than you did before on the same or similar goods and services.
State income tax is another big one. In New York, for example, the income tax rate can range from 4% to nearly 11%, depending on your income and filing status. In Washington state, there is no personal state income tax.
In some states, you’ll also be faced with real estate transfer taxes. For instance, Pennsylvania imposes a 1% transfer tax on the sales price of your property. This might not sound like much at first, but it can add up to thousands of dollars.
Car-Related Fees
If you plan to bring your car with you when you move, you’re going to need to factor in certain costs, like vehicle registration and title transfer fees. You might also need to renew or update your driver’s license once you move, which can cost money.
“When moving to a new state, you’ll need to register your vehicle and get a new driver’s license,” said Colten Claus, an associate broker with 8z Real Estate. “The fees can vary widely. For example, in California, the vehicle registration fee is typically around $60, but there are additional charges that can make the total much higher.”
Keep in mind that auto insurance rates can also vary by state due to local insurance regulations and risk factors. Auto insurance tends to be higher in Michigan, for example, than in Virginia.
Moving Insurance
Whether you rent or buy a home, you might want to get moving insurance before you go. This isn’t essential, but it can give you peace of mind.
“Consider the cost of moving insurance to protect your belongings during transit,” Dowski said. “The cost depends on the value of your items and the coverage options you choose.”
Home Inspection and Appraisal Fees
If you are buying property, you’ll need to account for a whole host of fees associated with the purchase. This includes appraisal and inspection fees, which can vary based on location.
“If buying a home, the home inspection and appraisal are essential but can be an unexpected cost for many,” Claus said. “Home inspections can range from $300 to $500, and appraisals can cost a similar amount.”
Utility Connection Fees
This might not be as much of a concern if you’re renting, but if you plan to set up your own utilities, you’ll have to cover some upfront costs, like connection fees and initial deposits. Factors like where you live, the available services, the service providers and even your credit score can affect the costs.
“Setting up utilities in a new state may involve connection fees or deposits,” Claus said. “These fees can range from $20 to $200 depending on the utility and state.”
Moving Costs
If you’re packing up your belongings for the big move, you’ve probably already accounted for this expense, but it’s worth mentioning even so.
“The cost of moving belongings can vary significantly based on distance, amount of belongings and whether you hire professional movers,” Claus said. “On average, long-distance moves can cost anywhere from $2,000 to $5,000.”
Local Cost of Living
When it comes to cost of living, not all states are created equal. According to the Missouri Economic Research and Information Center, states like Oklahoma, Mississippi, Kansas, West Virginia and Alabama have a lower-than-average overall cost of living. This means your money will go further, assuming you keep a similar income to what you have now.
But other states, like Hawaii, Massachusetts, California and New York, have a much higher cost of living. This means things like groceries, housing, utilities and transportation can be more expensive than the national average.
Be sure to account for cost-of-living adjustments before relocating.
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