The Trade-off: Affordable Living in Texas Comes with Higher Property Taxes

The Property Tax Trade-Off

Californians are flocking to Texas in search of a more affordable life. However, while housing and gas prices are significantly cheaper in Texas, property taxes are typically higher. Many people who have made the move, however, say that the benefits of Texas outweigh its steep property taxes.

Higher Property Tax Rates in Texas

Property tax rates in Texas are higher compared to California. In California, property taxes are capped at 1% of a home’s value due to Proposition 13. On the other hand, the average property tax percentage rate in Texas is 1.74%. This difference is partly due to the fact that Texas does not collect state personal income tax. Texas property tax rates can range from 1.6% to 2.7%.

Offsetting Perks in Texas

Although Texas has higher property taxes, there are other tax advantages that balance them out. One major advantage is that Texas has no state income tax, which can be like a significant raise for residents. The state also has a lower sales tax rate compared to California. Additionally, Texas offers more affordable housing options, with the average home value being significantly lower than in California.

Mixed Opinions Among Texas Settlers

Despite the higher property taxes, many Californians who have moved to Texas find them negligible or even a fair trade-off for the overall benefits of living in the state. Some argue that the percentage rates may be higher, but the lower cost of homes offsets that difference. Others appreciate the absence of a state income tax and find the overall tax burden to be more manageable. Ultimately, the decision may vary depending on individual preferences and financial circumstances.

Property Tax Relief Efforts

Property taxes are a topic of discussion and concern for many Texans, especially as housing prices and property taxes continue to rise with the influx of new residents. In response to this, Proposition 4 was passed in November, aiming to provide property tax relief. The $12.7 billion package will lower property tax rates and increase the homestead exemption to alleviate the burden on homeowners.

Source: Californians who moved to Texas reveal the one thing that gave them sticker shock in their new state