Over the last few years we have seen and heard stories of a spike of people moving from California to Bend Oregon. As Oregon wealth advisors and long-term residents, here’s our take on why people are leaving California for Oregon, and what you should know about some important differences (income and estate taxes, legal) between living in California and Oregon.
Before we get started, we are financial advisors in Bend with clients located across the country. We’ve written the following blogs about financial matters in Oregon, please check them out if you’d like.
And now onto the blog!
Cost of living
Is it cheaper to live in Oregon than California? Let’s first examine some facts about how much it costs to live in California.
- According to Ramsey Solutions, the cost-of-living in an average California city is 38% more expensive than the average city elsewhere in the United States. The average cost of living in California is $46,636 per year.
- According to Meric, California is the third most expensive state in the country.
This is for a number of reasons. Costs tend to be higher in California (which you probably already know if you’re reading this) in terms of:
But how does this stack up to the cost of living in Oregon?
According to the Meric article, Oregon ranks sixth of all states in terms of cost of living. Depending upon where you live, it may not be all that much cheaper.
Which leads us to the next question: where are people moving in Oregon when they leave California? Is it that much better – or are they California dreaming?
Let’s take a look.
Where are Californians moving to in Oregon?
As financial advisors in Bend, Oregon, we’re familiar with the lifestyle that many people have in Central Oregon and its surrounding area. It’s a 12 hour drive and a 2-3 hour flight to get from Los Angeles, California to Portland. There is only one Amtrak train that goes from San Francisco to Portland, and it takes a little more than 26 hours.
But most of the time, we don’t hear about people moving to Portland, but rather to the beautiful high desert of Central Oregon and the lush Willamette Valley:
Californians love living in Bend, Oregon for its combination of natural beauty, outdoor recreation opportunities, and its high desert climate with 250 sunny or mostly sunny days per year. Located in the foothills of the Cascades on the Deschutes River, Bend has temperate weather all year and a family friendly culture.
Is Bend Oregon good place to live? It’s one of the more expensive cities in Oregon, yet it is still less expensive than many places in California. Its cost of living is 5.5% higher than the national average, yet less expensive than many cities in California. According to Best Places, Bend boasts the highest median home cost in Oregon ($634,200), yet this is still 38% less expensive than Costa Mesa, California or almost 50% less expensive than San Jose.
Eugene-Springfield is the second-largest city in Oregon and home to the University of Oregon (Go Ducks!). As wealth managers in Eugene, Oregon for nearly 30 years, we have found that our clients love it because it offers the amenities of an urban location (Opera, Bach Festival, world-class micro breweries and food scene) with the community spirit of a small city (Saturday Market, Oregon Country Fair). With a median home price of $408,700, Eugene is much more affordable than Bend or Portland.
Salem is the capital of Oregon and, like Eugene, is located in the Willamette Valley. Salem is more diverse than other mid-sized cities in the state. It is also more affordable, with home prices even lower than Eugene and nearly half as expensive as Bend.
Things you should know before moving from California to Bend Oregon
There are several financial, tax, and legal considerations to think about before you leave California and move to Oregon.
There are significant tax differences between California and Oregon. California’s tax rates are some of the highest in the country. If you were to leave California for Oregon, but still derive income from a source within California, you’re still on the hook for income tax on that money. On the other hand, Oregon tax rates are a bit lower for individuals and companies, property tax is a bit higher, and there is no state sales tax.
Here’s a table comparing California and Oregon taxes, derived from data presented by Tax Foundation.
|State||Top Individual Income Tax Rate||Top Corporate Income Tax Rate||State Sales Tax rate||Property taxes as % of home value|
Estate Taxes and Planning
California does not have estate or inheritance taxes. However, Oregon estate tax rates are between 10 and 16% for estates valued at over $1 million (the first million is not taxed). This may be an important consideration for high net worth individuals.
Furthermore, there are estate planning changes that need to be made in the event of a move from California to Oregon.
- You’ll need to review your trust, will, living will, and healthcare proxy documents.
- If your net worth is significantly more than $1 million, you may want to consider strategies to reduce your taxable estate.
- There are differences in power of attorney laws between the two states, and a California POA may not be honored in Oregon.
- You may need to think about getting different guardians for your children; out of state guardians may not be ideal for the short term.
Distribution of property
When you leave California for Oregon, you are exiting a community property state and entering a separate property state. This means that in event of a divorce, property division rules would change.
Still considering moving to Oregon?
We hope our blog touching upon the financial differences between California and Oregon has been helpful. If you are still interested in moving from California to Bend Oregon, you may want to work with a Oregon financial advisor.
We are a fee-only, fiduciary wealth management firm based in Bend and Eugene Oregon, serving clients across the country. If you’re interested in engaging with us further, please reach out and set up a time to meet.
If now isn’t the time to make this move, we hope you’ll at least join our newsletter.
If there is a topic you’d like us to consider for future newsletters, please let us know through our feedback form.
The information on this page does not describe every aspect of our investment advisory services nor does it contain all of our performance records, and it is intended for residents of the United States. Information provided is obtained from sources we believe to be reliable but is not guaranteed. Past results are not indicative of future performance. Nothing on this page should be construed as investment, tax, or financial advice. MCS Family Wealth Advisors® is owned by MCS Financial Advisors, LLC (MCS), an investment adviser registered with the United States Securities and Exchange Commission. We only conduct business where properly registered or exempt from registration.
Ramsey Solutions. (Dec 3, 2021) Cost of Living in California. https://www.ramseysolutions.com/real-estate/cost-of-living-in-california
Missouri Economic Research and Information Center. Cost of Living Data Series. https://meric.mo.gov/data/cost-living-data-series
SoFi. Cost of Living in California. https://www.sofi.com/cost-of-living-in-california/
BestPlaces. 2022 Cost of Living Calculator: Bend, Oregon vs Portland, Oregon. https://www.bestplaces.net/cost-of-living/bend-or/portland-or/84000
Salary.com. Cost of Living in Bend, OR. https://www.salary.com/research/cost-of-living/bend-or
Orem, Tina. (2022, Jan 5). NerdWallet. California State Tax: Rates and Who Pays in 2021-2022. https://www.nerdwallet.com/article/taxes/california-state-tax
Tax Foundation. Taxes in Oregon. https://taxfoundation.org/state/oregon/
Tax Foundation. Taxes in California. https://taxfoundation.org/state/california/
Geier, Ben. (Jan 4, 2022) SmartAsset. Oregon Estate Tax. https://smartasset.com/estate-planning/oregon-estate-tax#:~:text=The%20estate%20tax%20rate%20in,the%20tax%20on%20your%20estate
Aiston Law. (Sept 24, 2018). Estate Planning: I moved from California (or another state) to Oregon. https://www.aistonlaw.com/news-notes/estate-planning-i-moved-to-oregon-from-california