For years the pitch was simple. Washington has no income tax. Idaho does. So if you work anywhere near the state line and you're choosing where to buy, Spokane County wins and the conversation ends there.
That conversation ended differently this spring. In March 2026, Washington Governor Bob Ferguson signed SB 6346 into law, creating a 9.9 percent tax on household income above $1 million, set to take effect January 1, 2028. It doesn't touch a typical dual-income household earning $150,000 a year. But it broke the sentence real estate agents on both sides of the border had been repeating for a decade, and it did something more immediate than the 2028 start date suggests. It got high earners and business owners calling around.
North Idaho agents describe a specific week this spring when the phone didn't stop. One Coeur d'Alene-area agent reported fielding five calls in a single week from Western Washington buyers asking about establishing Idaho residency before the new law takes hold. That's not a rush of typical relocators chasing lower home prices. That's a narrower group doing exactly the math this post is about to walk through, and doing it early.
If you're comparing Spokane County to Post Falls or Coeur d'Alene right now, the honest answer isn't "Idaho is cheaper" or "Washington is cheaper." It's that the two states are cheap in different places, for different people, and the new Washington law just moved one of those lines. Here's how the numbers actually sit as of 2026.
The Property Tax Gap Nobody Puts On the Listing Sheet
Home prices tell one story. Property tax bills tell another, and it runs in the opposite direction.
Spokane County's effective property tax rate runs around 1.05 percent. Kootenai County, on the Idaho side, runs closer to 0.60 percent once Idaho's homestead exemption is applied. That exemption removes up to $125,000 from a primary residence's taxable assessed value, a benefit Washington has no equivalent for.
Run that against a real number. On a $750,000 primary residence, that gap works out to roughly $7,900 a year in property tax on the Spokane County side against about $4,500 a year in Kootenai County, a difference of around $3,400 annually. That's before you've touched the income tax question at all.
| Spokane County, WA | Kootenai County, ID | |
|---|---|---|
| Effective property tax rate | ~1.05% | ~0.60% (with homestead exemption) |
| Annual tax on a $750,000 home | ~$7,900 | ~$4,500 |
| Combined sales tax | 9.1% (Spokane city/county) | ~6.03% average |
| State income tax on wages | 0% (new 9.9% above $1M household income, effective 2028) | Flat 5.3% |
Sales tax follows the same pattern. Spokane's combined rate sits at 9.1 percent as of 2026, among the higher combined rates in the country. Idaho's average combined rate is about 6.03 percent, and groceries are exempt on the Idaho side. For a household that spends heavily on taxable goods, that gap adds up faster than most moving budgets account for.
What the Sticker Price Actually Buys You
Here's where the comparison gets more interesting than a simple state-line tax chart. As of June 2026, Spokane's median asking price sat at $449,000, running about $217 per square foot. Spokane Valley was close behind at $465,000 and $219 per square foot. Cross into Kootenai County the same month and Post Falls came in at $577,900 and $296 per square foot, with Coeur d'Alene at $749,900 and $383 per square foot.
The per-square-foot gap is the number most relocation spreadsheets miss. It isn't just that homes cost more in Post Falls or Coeur d'Alene. You're paying meaningfully more for the same square footage the moment you cross into Idaho, and demand hasn't cooled enough to close that gap. As of June 2026, 46 percent of Post Falls listings were already under contract, which tells you buyers are absorbing that premium rather than negotiating it away.
So the raw math on housing favors Spokane County right now. The raw math on ongoing taxes favors Idaho. Whether that nets out in your favor depends entirely on your income, not your home search.
The Wrinkle Idaho-Side Commuters Forget
If you live in Idaho and work in Spokane, you don't get to opt out of Idaho income tax by earning your paycheck across the border. Idaho taxes its residents on income earned anywhere, which means a Post Falls resident commuting into Spokane Valley still owes Idaho's flat 5.3 percent on those Washington wages. Idaho's rate dropped to that flat 5.3 percent through HB 40, locked in for 2026, a simplification from the state's older bracket system.
That doesn't erase the case for living in Idaho and working in Washington. It just means the "no state income tax" line only applies if you both live and earn on the Washington side. Plenty of dual-career households split the difference anyway, choosing based on schools, lot size, or commute rather than a tax line on a spreadsheet, and that's a reasonable choice. It's just not the same choice as the one the SB 6346 headlines are prompting.
Liberty Lake and the Buyers Who Refuse to Choose
Not everyone treats this as an either-or decision, and the geography of Liberty Lake explains why. Sitting right on the Washington side of the state line, Liberty Lake puts commuters roughly 20 minutes from downtown Spokane and roughly 25 minutes from downtown Coeur d'Alene, close enough to either job center that households splitting work between the two cities don't have to pick a side to make the commute work.
That's the same logic driving interest along the whole Spokane Valley to Post Falls corridor, where I-90 runs about 33 miles between the two downtowns, typically 35 to 40 minutes door to door outside of winter weather. For a household where one spouse works in Spokane and the other in Coeur d'Alene or Post Falls, the tax question isn't abstract. It's a real annual number that shows up differently depending on which side of the line the paycheck originates.
What This Actually Means If You're Deciding Right Now
None of this points to a universal answer, and that's the point. A household earning under six figures with most of its income as W-2 wages still likely comes out ahead avoiding Washington income tax entirely, assuming that income stays under the new law's $1 million threshold. A household with significant investment income, a business sale on the horizon, or compensation that could cross seven figures in the next two years is now looking at a materially different equation than they were looking at in 2025.
The property tax and sales tax gaps aren't going anywhere regardless of income level. Those favor the Idaho side consistently, and they're worth running against your actual spending and homeownership timeline before you assume the home price alone tells you which side of the border makes financial sense.
A Few Questions Worth Asking Before You Decide
Does the new Washington tax affect me if I don't make anywhere near $1 million? Not directly. SB 6346 applies to household income above $1 million and doesn't take effect until January 1, 2028. For most buyers comparing Spokane County to North Idaho today, the property tax and sales tax differences matter far more than this law does.
How does Idaho's homestead exemption actually work? It reduces the taxable assessed value of a primary residence and up to one acre of land by 50 percent, capped at $125,000. You apply through your county assessor's office, and it's specific to owner-occupied primary residences rather than second homes or investment property.
If I live in Idaho but work in Spokane, do I pay tax to both states? You'll generally pay Idaho income tax on those wages as an Idaho resident, since Idaho taxes residents on income regardless of where it's earned. You won't owe Washington income tax on wages, since Washington doesn't tax wage income at the state level. The details depend on your specific situation, so this is a conversation worth having with a CPA rather than assuming either way.
If you're weighing Post Falls, Coeur d'Alene, or another North Idaho community against the Spokane County side of this corridor, the numbers above are a starting point, not the whole picture. Every household's math looks different once you factor in your actual income structure, your timeline, and what you're trying to buy on either side of the line.
Dream Homes Idaho works this corridor daily, and we're glad to walk through what the North Idaho side of that math looks like for your specific situation. Find Your Idaho Dream Home when you're ready to talk it through.
