United States
Cost of living in New Mexico
Cost of living in New Mexico stands at 92.2, or 8 percent below the US average, placing it 37th out of 51 jurisdictions. The income tax was restructured by legislation effective January 2025, introducing a new 4.3 percent bracket in a graduated schedule that tops out at 5.9 percent. New Mexico conforms to the federal standard deduction, which rose to $15,750 for single filers in 2025 under recent federal legislation. The sales tax equivalent, technically a gross receipts tax, runs at a state base rate of 4.875 percent. New Mexico's price level of 92.2 makes it more affordable than Wyoming (92.7) and Tennessee (91.9) is just below it. The Albuquerque and Santa Fe metro areas pull the average upward, with Santa Fe in particular carrying some of the highest housing costs in the Mountain West relative to its size.
Price level
92.2
US = 100
National rank
37th
of 51, dearest first
Income tax
5.9%
top rate
Sales tax
4.875%
state base rate
What your salary is worth in New Mexico
Because prices here sit at 92.2 against the national 100, the same paycheck stretches differently than it would elsewhere. These figures hold buying power constant: the salary listed is what you would need in New Mexico to live as you would on the reference amount in another place.
| Same lifestyle as | $60,000 | $100,000 |
|---|---|---|
| US average | $55,320 | $92,200 |
| California (dearest) | $49,973 | $83,288 |
| Arkansas (cheapest) | $63,659 | $106,099 |
Compare New Mexico with anywhere in the US
To live the same in California you need
$84,046
to match $70,000 in New Mexico
Price level, US = 100
The equivalent salary keeps your purchasing power constant: it is your pay scaled by the ratio of the two price levels. Regional Price Parities measure what a fixed basket of goods and services costs locally. Source: U.S. Bureau of Economic Analysis, 2024.
New Mexico in context
New Mexico's internal cost variation is pronounced. Santa Fe's real estate market, driven by arts, tourism, and in-migration from coastal cities, now places median home prices well above the statewide figure, making it a notable outlier for a state at this price level. Albuquerque is more representative of the statewide average, with housing that remains affordable compared to western metros of similar size. Las Cruces and the state's smaller cities and rural areas are cheaper still. The gross receipts tax, which applies broadly to most business transactions and is often passed through to consumers, can result in an effective consumption tax that exceeds the nominal base rate. Federal government and military employment, along with national laboratories in Albuquerque and Los Alamos, provide stable high-wage employment that somewhat offsets the state's lower median household income. The 2025 income tax restructuring lowered rates for mid-range earners, improving the affordability outlook compared to prior years.
The closest state above New Mexico on price is Wyoming at 92.7. Just below sits Tennessee at 91.9.
Frequently asked questions
Is New Mexico expensive to live in?
New Mexico sits at a price level of 92.2 where the US average is 100, so a typical basket of goods and services costs about 8% less than the national norm. That ranks it 37th most expensive of 51 states. Housing is usually the largest single driver of the gap.
What salary do you need in New Mexico?
To match the buying power of $60,000 earned at the US average, you would need about $55,320 in New Mexico. The figure scales with the price level: a place dearer than average needs more, a cheaper one needs less. Your own number also depends on housing choice and household size.
How much tax does New Mexico charge?
New Mexico applies a top state income-tax rate of 5.9% and a base state sales tax of 4.875%. Brackets restructured by HB 252 effective Jan 1, 2025 (first major change since 2005), adding a new 4.3% bracket. NM conforms to the federal standard deduction; for tax year 2025 that is $15,750 (single) after the OBBBA increase (pre-OBBBA figure was $15,000). Sales tax is technically a gross receipts tax; state base rate 4.875%. Local jurisdictions can add their own sales tax on top.
Cost of living in other states
Price levels are Regional Price Parities from the U.S. Bureau of Economic Analysis, Regional Price Parities (SARPP, MARPP), 2024 (public domain). State tax figures are the latest published rates from state revenue departments. All figures are estimates for general comparison and not financial advice; your own costs depend on housing, household size and lifestyle.