Cost of Living in Nebraska
Things cost about ▼ 10% less in Nebraska than the national average.
What Things Cost in Nebraska
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
Nebraska is affordable, stable, and frequently overlooked. Omaha, the largest city, is home to Berkshire Hathaway, Mutual of Omaha, and a surprisingly vibrant food and arts scene. Lincoln, the state capital, revolves around the University of Nebraska and state government. The cost of living is about 9% below the national average, with housing roughly 22% below. Property taxes are the main financial drawback at about 1.61%, among the highest in the Midwest. Nebraska has been gradually reducing its income tax rates and recently began exempting Social Security benefits from state tax, making it more retirement-friendly.
Nebraska at a Glance
Taxes in Nebraska
Nebraska's state income tax tops out at Up to 5.84%. The combined sales tax averages 5.5%. Property taxes run about 1.61% of home value, which on a $218,000 median home means roughly $3,510/year.
Cities in Nebraska
Ranked from least to most expensive. Index 100 = national average.
Explore Nebraska
FAQ About Nebraska
Omaha is consistently rated among the best mid-size cities for quality of life. Housing is affordable (median around $250,000), the job market is strong in insurance, finance, and tech, and the cost of living is about 10% below the national average. The city has invested in its downtown and cultural amenities. Warren Buffett's presence has brought global attention and investment. The main drawbacks are cold winters and the high property tax rate.
Nebraska relies heavily on property taxes to fund local government and schools because the state limits other revenue sources. The effective rate of about 1.61% is among the highest in the region and is a persistent political issue. A $250,000 home costs over $4,000 per year in property taxes. This is the main financial downside of otherwise-affordable Nebraska living.
Nebraska has recently begun phasing out its tax on Social Security benefits, a change that is being implemented over several years. Previously, Nebraska was one of a handful of states that fully taxed Social Security, which drove some retirees to relocate to neighboring Iowa or South Dakota. The phase-out makes Nebraska significantly more retirement-friendly.