Tennessee vs North Carolina: Taxes, Home Prices and Costs Compared (2026)

Quick answer (as of November 2026) Tennessee doesn't tax wages or retirement income. North Carolina taxes most income at a flat 3.99 percent in 2026, dropping to 3.49 percent in 2027 under a law passed this year. North Carolina charges less sales tax, 6.75 to 8.25 percent against 9 to 9.75 percent, and only 2 percent on groceries. The Middle Tennessee property tax lines in this guide take a smaller share of a home's value than Raleigh, Durham or Asheville. Homes cost more around Nashville: Realtor.com's October 2026 median listing price was $529,900 for the Nashville metro, $445,000 for Raleigh and $419,900 for Charlotte.

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You've got it down to two states, and both run below the U.S. average on prices. The real difference is how each one collects its money, and that's what moves your monthly budget.

I moved my family here from California, and I live in Canterbury in Thompson's Station. North Carolina is a good state, and I'm not here to talk you out of it. Here's how the two compare line by line, from each state's own tax agencies and federal data, so you can pick on numbers. If you want help running yours, text or call me at 615-392-1186.

How do Tennessee and North Carolina compare on cost of living?

Tennessee comes out cheaper overall, and North Carolina wins on sales tax and groceries. The Bureau of Economic Analysis (BEA) put Tennessee's 2024 price level at 91.9 and North Carolina's at 94.3, with the U.S. at 100. Tennessee was lower on every line BEA tracks, and the widest gap was utilities.

Property tax figures are the county and city rates published for the year shown and are for planning only. Your actual bill depends on the assessed value, any exemptions and the city or district the home sits in. Confirm with the county assessor or trustee and your tax professional before you rely on a number.

BEA's index compares prices in one year, so it can't tell you what your own bills will be. The sections below go line by line. For the full Tennessee budget against the U.S., read my cost of living in Tennessee guide.

Does North Carolina have a state income tax?

Yes. North Carolina taxes individual income at a flat 3.99 percent for 2026. Tennessee has no state income tax on earned income, so there's no state withholding from a Tennessee paycheck, according to the Tennessee Department of Revenue.

North Carolina has been cutting its rate for years. The NC Department of Revenue lists 4.99 percent for 2022, 4.75 percent for 2023, 4.5 percent for 2024 and 4.25 percent for 2025. Session Law 2026-41, the state budget signed in July 2026, sets 3.49 percent for 2027 through 2029, 3.24 percent for 2030 through 2032 and 2.99 percent after 2032, with more quarter-point cuts possible from 2035 if state revenue clears targets in the law.

On $100,000 of North Carolina taxable income, 3.99 percent is $3,990 a year. In Tennessee that line is zero. Federal income tax is the same in both states. Talk to a tax professional about what the move means for your own return.

Which state has the higher sales tax, Tennessee or North Carolina?

Tennessee does. Tennessee's state rate is 7 percent and local rates add up to 2.75 percent, so most purchases carry 9 to 9.75 percent, per the Tennessee Department of Revenue. North Carolina's state rate is 4.75 percent, and its county totals run from 6.75 to 8.25 percent as of July 1, 2026.

Mecklenburg went to 8.25 percent on July 1, 2026, when it added a 1 percent county tax, per the NC Department of Revenue. North Carolina taxes qualifying food at a 2 percent local rate, and the state rate doesn't apply. Tennessee taxes groceries at 4 percent plus the local rate, and Davidson County cut its local food rate to 1.75 percent on November 1, 2026, per Revenue Notice 26-19.

On $1,000 of taxable purchases, that's $97.50 in Franklin and $72.50 in Raleigh. On a $1,000 grocery bill, it's $67.50 in Franklin and $20 in Raleigh.

Which state has lower property taxes, Tennessee or North Carolina?

On the cities in this guide, Tennessee. The Williamson County and Spring Hill lines take 0.33 to 0.56 percent of the value on file each year. Raleigh, Durham and Asheville take 0.71 to 1.02 percent even after North Carolina's own adjustment, and Nashville and Charlotte land about even.

The two states figure the bill differently. In Tennessee, the rate applies to 25 percent of the appraised value, according to the Tennessee Comptroller. In North Carolina, property is assessed at its true value and the rate applies to all of it, under N.C. Gen. Stat. 105-284. Here's the same $400,000 value on the newest published county and city rates, as of November 2026.

Tennessee rates come from the Williamson County Trustee for 2026, Maury County Resolution 07-26-29 plus the City of Spring Hill's $0.739, and the Davidson County Assessor, whose newest posted rates are for 2025. North Carolina rates are the combined county and city rates for fiscal year 2026 to 2027 from the NC Department of Revenue, which leaves out special district rates such as fire districts.

Property tax figures are the county and city rates published for the year shown and are for planning only. Your actual bill depends on the assessed value, any exemptions and the city or district the home sits in. Confirm with the county assessor or trustee and your tax professional before you rely on a number.

North Carolina counties reappraise on their own schedules, so the value on file can trail what homes sell for. The NC Department of Revenue adjusts for that with an effective rate. For fiscal year 2026 to 2027 it puts Raleigh at 0.867 percent, Charlotte at 0.701 percent, Durham at 1.017 percent and Asheville at 0.708 percent. Asheville's drops the most because Buncombe County last reappraised in 2021. In Tennessee, too, the appraised value can differ from the price you pay.

North Carolina also bills a property tax on your car every year. Its Tag and Tax Together program collects the vehicle property tax with the yearly registration renewal. In Tennessee, personal property that isn't commercial, industrial or public utility property isn't taxed, per Tennessee Attorney General Opinion 00-062. My Williamson County property tax guide has every city line in that county.

How do Tennessee and North Carolina tax retirement income?

Tennessee doesn't tax it. North Carolina doesn't tax Social Security, and it taxes most other retirement income at the flat rate unless a specific deduction applies.

The Tennessee column comes from the Tennessee Department of Revenue. North Carolina's comes from its Department of Revenue pages on Social Security, the Bailey decision and military retirement. North Carolina starts from your federal adjusted gross income, so anything without its own deduction stays in. Talk to a tax professional before you count on any of these for your own income. My guide to retiring in Tennessee covers property tax relief at 65 and Medicare plans.

Are homes cheaper in Tennessee or North Carolina?

Statewide, North Carolina's are a little cheaper. Realtor.com's median listing price in October 2026 was $399,900 in North Carolina and $425,000 in Tennessee, per Realtor.com Economic Research. North Carolina's was down 4.5 percent from a year earlier and Tennessee's was down 1 percent.

Price per square foot was close: $212 in North Carolina and $220 in Tennessee. BEA's 2024 housing price level was 81.4 for North Carolina and 79.1 for Tennessee. The bigger difference is between metros, and Nashville runs higher than Raleigh or Charlotte.

Is Nashville or Charlotte more expensive?

Nashville costs more for a house, and Charlotte costs more on the other lines BEA tracks. In October 2026, Realtor.com's median listing price was $529,900 in the Nashville metro and $419,900 in the Charlotte metro. BEA's 2024 overall price level was 96.3 for Nashville and 97.3 for Charlotte, because Nashville's prices for utilities and other services run lower.

Listing figures are from Realtor.com Economic Research and price levels from the BEA, with the U.S. at 100. Listing prices fell from a year earlier in every metro in the table: 1.3 percent in Nashville, 2.6 percent in Raleigh, 3.2 percent in Durham, 4.1 percent in Charlotte and 3.8 percent in Asheville. A median listing price is what sellers are asking, not what homes sold for.

Raleigh and Nashville are close on housing, 103.5 and 104.6 on BEA's scale. The Charlotte metro includes counties in South Carolina, so its numbers aren't North Carolina alone. My Nashville suburbs guide compares 13 towns around Nashville by drive, taxes and price.

How do utilities and gas compare?

Electricity costs less in Tennessee. Residential customers paid an average of 13.42 cents per kilowatt-hour in Tennessee and 14.95 cents in North Carolina in August 2026, against 18.16 cents for the U.S., per the U.S. Energy Information Administration. At those averages, 1,000 kilowatt-hours costs about $134 in Tennessee and about $150 in North Carolina.

Gas is cheaper in North Carolina right now, for a reason with an end date. AAA had regular at $3.26 in North Carolina and $3.60 in Tennessee on November 9, 2026, with the national average at $4.01. North Carolina has set its motor fuel excise tax to zero from October 10 through November 30, 2026, under Session Law 2026-62. A month earlier, before the suspension, AAA had North Carolina at $4.10 and Tennessee at $3.96.

How does the weather compare?

Nashville, Raleigh and Charlotte have nearly the same summers and winters. Nashville gets a few more inches of rain a year. These are NOAA's 1991 to 2020 normals at each city's main airport.

Normals are from the NOAA National Centers for Environmental Information. North Carolina's mountains and coast have their own weather, and the table doesn't cover them.

Where would you land in Middle Tennessee?

Your tax line and your price depend on the county and the city limits, so start there. Realtor.com's October 2026 median listing price was $1,157,200 in Williamson County, $489,900 in Maury County and $525,000 in Davidson County, against $475,000 in Wake County and $444,097 in Mecklenburg County. Here's where I work.

Property tax figures are the county and city rates published for the year shown and are for planning only. Your actual bill depends on the assessed value, any exemptions and the city or district the home sits in. Confirm with the county assessor or trustee and your tax professional before you rely on a number.

Spring Hill sits in two counties, and a ZIP code won't tell you which side a house is on. I check the county and the city limits on every address before you write an offer, and I confirm the College Grove line with the Assessor on each one. My Spring Hill property tax guide shows both sides of the county line.

Weighing Tennessee against North Carolina?

I'll run these numbers on the actual homes you're looking at, with the county, the city limits and the tax line each one sits on. Can't get here to tour? I record a video walkthrough of the house and send you an unlisted YouTube link, so you can rewatch it as many times as you need.

I've been selling real estate since 2013, and my family and I love living here. For the bigger picture, read moving to Tennessee, is Tennessee a good place to live, how to buy a house in Tennessee from another state and how to become a Tennessee resident. Coming from California? My California equity calculator shows what your sale could buy here. Tell me where you're moving from and when, and text or call me at 615-392-1186. You can read more about how I work with buyers moving in from out of state.

Frequently asked questions

Is Tennessee cheaper than North Carolina?

Overall, yes. The Bureau of Economic Analysis put Tennessee's 2024 price level at 91.9 and North Carolina's at 94.3, with the U.S. at 100. Tennessee was lower on every line BEA tracks, and the widest gap was utilities.

Does North Carolina have a state income tax?

Yes. North Carolina taxes individual income at a flat 3.99 percent for 2026. Tennessee has no state income tax on earned income, so there's no state withholding from a Tennessee paycheck, according to the Tennessee Department of Revenue.

What is the sales tax in North Carolina?

North Carolina's state rate is 4.75 percent, and its county totals run from 6.75 to 8.25 percent as of July 1, 2026. Wake County is 7.25 percent and Mecklenburg County is 8.25 percent. Qualifying food is taxed at a 2 percent local rate.

Does North Carolina tax Social Security?

No. North Carolina doesn't tax Social Security, and it taxes most other retirement income at the flat rate unless a specific deduction applies. Tennessee doesn't tax retirement income at all.

Which state has lower property taxes, Tennessee or North Carolina?

On the cities in this guide, Tennessee. The Williamson County and Spring Hill lines take 0.33 to 0.56 percent of the value on file each year. Raleigh, Durham and Asheville take 0.71 to 1.02 percent even after North Carolina's own adjustment, and Nashville and Charlotte land about even.

Is Nashville or Charlotte more expensive?

Nashville costs more for a house, and Charlotte costs more on the other lines BEA tracks. In October 2026, Realtor.com's median listing price was $529,900 in the Nashville metro and $419,900 in the Charlotte metro. BEA's 2024 overall price level was 96.3 for Nashville and 97.3 for Charlotte, because Nashville's prices for utilities and other services run lower.