Cost of Living in Tennessee — Housing, Taxes & Everyday Expenses
No income tax, Nashville boom, below-average costs
Data: 2026-Q2 · BLS · HUD · KFFOverview
Tennessee combines no state income tax with below-average costs. Nashville has emerged as a major music, healthcare, and tech hub with significant population growth.
Housing costs
Median 1BR rent in Nashville is approximately $1,700-$1,900. Memphis is significantly more affordable at $1,000-$1,100. Knoxville and Chattanooga are $1,100-$1,300.
1BR FMR across major Tennessee cities: $1,578 – $1,578/mo (HUD FY2026)
Tax reality
Tennessee has no state income tax on wages. The Hall Tax on investment income was eliminated in 2021.
Tennessee has no state income tax — a meaningful boost to take-home pay versus high-tax states.
Everyday expenses
At a cost of living index of 90, Tennessee is about 10% cheaper than the national average of 100. Tennessee's no income tax saves approximately $3,000-$5,000/year on a $70,000-$100,000 salary. Nashville's rising housing costs partially offset this advantage.
City comparison
Salary reality in Tennessee
Cost of Living in Tennessee — FAQ
Does Tennessee have a state income tax?
No. Tennessee has no income tax on wages. The Hall Tax on investment income was eliminated in 2021.
Is Nashville affordable?
Nashville has become significantly more expensive since 2018. 1BR rent averages $1,700-$1,900. It remains cheaper than comparable coastal cities but is no longer the bargain it once was.