Moving from California in 2026: Where Do People Go and Why?

California has been experiencing net domestic out-migration for several years. IRS migration data, moving company reports, and Census Bureau estimates all confirm the same trend: more people leave California for other states than arrive from them. The outflow spans income levels — from high-earning tech workers who can work remotely to middle-income households priced out of the housing market to retirees seeking lower costs.

The question most Californians considering a move want answered is not just “where should I go?” but “how much will I actually save?” This guide provides a data-driven breakdown of the most popular California exit destinations, with specific numbers on taxes, rent, and take-home pay.

Why Californians Leave: The Financial Case

California’s financial burden on residents is substantial:

State income tax: California has the highest marginal state income tax rate in the U.S. at 13.3% (plus 1% mental health surcharge, making the effective top rate 14.3% for very high earners). The 9.3% bracket begins at $68,350 for single filers in 2026 — which is below the median income in most Bay Area metros.

Housing: California’s median home price is over $800,000 statewide, and north of $1.2 million in the Bay Area. Annual rent for a 2-bedroom apartment in San Francisco runs approximately $34,800/year; in Los Angeles, approximately $28,800/year.

Property taxes: Proposition 13 caps property tax increases for existing owners, but new buyers pay taxes on current values — creating situations where a neighbor in a decades-old purchase pays $2,000/year while you pay $15,000/year on an equivalent home purchased today.

Cost of living: Bay Area and Los Angeles metro RPP indices of approximately 125–135 mean everyday costs run 25–35% above the national average.

For a household earning $150,000 in California, the combined burden of state income tax ($18,000–$20,000), housing ($28,800–$34,800 in rent, or higher for ownership), and elevated cost of living can leave less disposable income than a $110,000 salary in Texas or Arizona.

The Most Popular Destinations

Based on IRS migration data, U-Haul and moving company indices, and Census Bureau annual estimates, the most common destinations for California out-migrants are:

Texas (particularly Austin and Dallas-Fort Worth)
Arizona (Phoenix)
Nevada (Las Vegas, Reno)
Washington (Seattle)
Oregon (Portland)
Colorado (Denver)
Florida (Miami, Tampa)
Idaho (Boise)

Each offers a very different set of tradeoffs.

Texas: The Numbers-First Choice

Texas is the top destination for California out-migrants, and it’s almost entirely economically motivated.

Tax savings at $120,000 California salary:

California state tax: approximately $9,500
Texas state tax: $0
Annual savings: $9,500

Rent savings (vs. Los Angeles, 2-bedroom):

Los Angeles: approximately $2,400/month ($28,800/year)
Austin: approximately $1,595/month ($19,140/year)
Dallas: approximately $1,370/month ($16,440/year)
Annual rent savings vs LA: $9,660 (Austin) to $12,360 (Dallas)

Combined annual financial advantage (Texas vs LA, at $120,000):

vs. Austin: approximately $19,000/year
vs. Dallas: approximately $21,000/year

At a $200,000 salary, the advantage widens considerably because California’s higher marginal rates escalate:

California state tax at $200,000: approximately $18,000
Texas state tax: $0
Plus rent savings: $12,000–$20,000
Total annual advantage: $30,000–$38,000

Over 10 years, invested at modest returns, that’s $400,000–$500,000 in additional wealth.

Compare California and Texas cities directly. Explore Austin, Dallas, and Houston.

Who Texas works for: Remote tech workers who can maintain their California salary. Finance, logistics, and corporate services workers. Anyone in tech who can access Austin’s employer ecosystem (Apple, Dell, Oracle, Tesla, AMD).

Who should think carefully: Workers whose salary is specifically tied to California’s labor market premium. Some Bay Area tech roles pay 20–30% more than equivalent Texas roles — if you take a California salary cut to move to Texas, the math changes.

Arizona: Lower Cost, Simpler Decision

Phoenix is the second most popular California destination, and it makes the strongest case for workers who don’t have a specific Texas employer to anchor them.

Arizona’s 2.5% flat income tax is one of the lowest in the country. At $120,000, it generates approximately $2,875 in state tax — $6,625 less than California’s $9,500 at the same income. Arizona doesn’t fully eliminate income tax like Texas, but the difference between Arizona’s 2.5% and California’s 9.3%+ is enormous.

Phoenix rent runs approximately $1,485/month for a 2-bedroom (HUD FMR), compared to $2,400 in LA — a savings of approximately $11,000/year.

Combined California vs Phoenix financial advantage at $120,000:

State income tax savings: $6,625
Rent savings: $11,000
Total: approximately $17,600/year

The cost-of-living index also favors Phoenix (approximately 97) over Los Angeles (approximately 122). The practical effect is that groceries, services, and everyday expenses are 10–15% cheaper.

Phoenix’s job market has grown significantly in semiconductor manufacturing (TSMC’s massive new fab, Intel’s expansion), technology (Apple operations, Microsoft, Amazon), healthcare, and financial services. For semiconductor engineers specifically, Phoenix/Chandler is now a premier location.

See Phoenix’s full cost breakdown and compare Phoenix directly to Los Angeles.

Nevada: The Closest No-Tax Option to California

Las Vegas and Reno appeal to Californians who want the tax elimination of Texas without crossing the country.

Nevada has no state income tax. Las Vegas is a 4-hour drive from Los Angeles; Reno is 3.5 hours from the Bay Area. The proximity has made Nevada a popular choice for California business owners, real estate investors, and high earners who want to establish legal domicile in a no-tax state while maintaining close ties to California.

A critical warning: California’s Franchise Tax Board is one of the most aggressive state tax authorities in the country for pursuing former residents who claim Nevada domicile. To successfully establish Nevada residency, you must:

Spend more than 183 days per year in Nevada
Register to vote, get a Nevada driver’s license, and change vehicle registration
Update bank accounts, business registrations, and professional licenses
Demonstrate genuine intent to remain in Nevada as your primary residence

People who maintain strong California ties (property, family, business operations) while claiming Nevada residency have been assessed back taxes plus penalties by the FTB. The move must be real to withstand scrutiny.

For those who do genuinely relocate, Las Vegas offers genuine financial advantages: no income tax, 2-bedroom rents around $1,400/month (HUD FMR), and a cost of living well below Southern California. See Las Vegas data.

Reno is increasingly attractive to Bay Area workers. The city has become a tech and logistics hub (Tesla Gigafactory, Apple Data Center, Amazon, Google) and offers salaries that are high relative to its cost of living. See Reno.

Washington: High Salary, No Tax, Higher Rent

Seattle is the destination for California tech workers who want to stay in a major tech hub while eliminating state income tax.

Washington has no state income tax. For a software engineer earning $200,000, this saves approximately $16,000 per year compared to California — a substantial annual benefit.

The catch: Seattle’s rent is not dramatically lower than Los Angeles. A 2-bedroom HUD FMR in Seattle runs approximately $2,300/month ($27,600/year) vs LA’s $28,800/year. The rent savings ($1,200/year) are minor compared to the tax savings ($16,000/year at $200,000 salary), but you shouldn’t expect Seattle to feel dramatically cheaper than California on housing.

Seattle makes the most sense for high-earning tech workers (Amazon, Microsoft, Google, Stripe, Meta all have major Seattle presences) where the income tax savings alone are large enough to make a big difference. At $250,000+, the Washington vs California comparison produces savings of $25,000–$35,000 per year.

Compare Seattle and San Francisco.

Colorado: Quality of Life Trade, Not Pure Finance

Denver is a popular choice for California transplants who prioritize lifestyle — mountains, outdoor access, a vibrant urban scene — over maximum financial savings.

Colorado has a 4.4% flat income tax, which is lower than California’s top rates but not zero. Denver rent has risen significantly: 2-bedroom HUD FMR runs approximately $1,900/month. After tax and rent, Denver offers a meaningful improvement over the Bay Area but not as dramatic as Texas or Arizona.

The typical California-to-Denver financial improvement at $100,000:

State tax savings: approximately $5,500
Rent savings (vs SF): approximately $12,900
Total: approximately $18,400/year

That’s real money. But it’s less than Austin or Phoenix in most scenarios. Denver’s appeal is more about lifestyle than optimization.

Oregon: The Trap Californians Fall Into

Portland deserves special mention as a destination that looks attractive but often disappoints financially.

Oregon has one of the highest state income tax rates in the country — top marginal rate of 9.9% on income above $250,000, and 8.75% starting at $125,000 for single filers. The tax burden is comparable to California, which surprises many Californians who assume “anywhere outside California” means lower taxes.

Portland’s rent is lower than San Francisco but not dramatically lower than Los Angeles. The combination of high state taxes and moderate rent savings makes Oregon a lifestyle relocation, not a financial one. If your reason for leaving California is financial, Oregon is not the answer.

Idaho: Emerging Option for Price-Sensitive Movers

Boise has appeared in migration data as a California destination, particularly for Silicon Valley workers who want to remain in the Mountain West while reducing costs. Idaho’s cost of living and rent are low, though Boise has seen significant appreciation.

Idaho has a flat income tax rate of 5.695% — meaningful but lower than California. Boise’s 2-bedroom rents run approximately $1,200/month. For families who need space and prefer a smaller-city lifestyle, Boise has real appeal.

What Californians Often Underestimate

Sales tax: California’s base sales tax is 7.25%, with local additions bringing many areas to 9.5–10.5%. Texas has 6.25–8.25%; Arizona has 5.6–10.7% (varies widely by city). Nevada has 4.6% base rate with local additions. Sales tax is visible in everyday purchases but not captured in net income comparisons.

Property tax on eventual home purchase: California’s Prop 13 caps existing homeowners’ tax increases, but a new buyer pays taxes on current market value. Texas and Arizona have higher property tax rates (1.5–2.2% effective) but lower home values. The net property tax cost often ends up similar or in Texas/Arizona’s favor.

Healthcare: California has strong consumer protections for insurance markets. Moving to states with less regulation can mean higher premiums or fewer plan options, particularly for self-employed workers who buy on the individual market.

The Financial Summary

At most income levels, the states that produce the largest financial improvement over California are, in order:

Texas (no income tax, lower rent in Austin and Dallas)
Nevada (no income tax, lower rent in Las Vegas; similar rent in Reno)
Arizona (2.5% flat tax, significantly lower rent in Phoenix)
Washington (no income tax; rent similar to LA but much lower than SF)
Colorado (4.4% flat; lower rent than SF, similar to LA)

For most Californians making a purely financial decision, Texas and Arizona offer the best combination of tax savings and rent savings. But the best destination depends on your career, your industry, and where your job opportunities are.

Use our comparison tool to model your specific California city versus any destination with your exact salary.

Data & Methodology

Tax figures are estimates based on 2026 federal and state income tax brackets for single filers using the standard deduction. California rates reflect the 2026 graduated schedule including the 1% mental health surcharge above $1M (which doesn’t affect most of the examples here). Rent figures are HUD Fair Market Rents (FY 2026) for 2-bedroom apartments. Cost of living references BEA Regional Price Parities (2022 vintage). Migration data references patterns from IRS Statistics of Income, Census Bureau annual population estimates, and U-Haul migration indices. All financial figures are approximations for illustrative comparison.