Lots of factors go into the best state to retire in but for the purposes of this article, lets look at property taxes. When you retire, hopefully your house is paid for and after that, depending where you live, your property taxes could very well be your biggest annual bill. Here are state property tax rates. The lower the better so while Texas is a great place to make your money with no state income tax, it is a lousy state to retire to with the highest property tax in the nation. A $400,000 house will pay over $10,000 annually in property tax!