Why are property taxes so HIGH in Texas?? (Austin, Bastrop: sales, real estate)

[American JP]

I really want to move to Austin, TX. People say its really affordable to live there but doing my research I have found a lot of hidden cost. Properties in Austin, TX is not that much cheaper compared to homes in cities I have lived in (Honolulu and Seattle). Sure you get a bigger lot but to be honest I don't really need 5 acres of land to live on. People say its because there is no state income tax but Seattle and Las Vegas also do not have an income tax and their property taxes are still 2 or 3 times less than Texas.

[EzPeterson]

Many reasons. Measuring just one or two pieces of the total tax burden in a state will give you results all over the map.

On the whole, Texas has a total tax burden under 8%, while Washington state runs about 9.5%. Austin, however, does probably run higher, since real estate prices are higher than other TX cities.

Just goes to show that you probably can't make life decisions based on what "people say".

[hound 109]

Originally Posted by American JP

I really want to move to Austin, TX. People say its really affordable to live there but doing my research I have found a lot of hidden cost. Properties in Austin, TX is not that much cheaper compared to homes in cities I have lived in (Honolulu and Seattle). Sure you get a bigger lot but to be honest I don't really need 5 acres of land to live on. People say its because there is no state income tax but Seattle and Las Vegas also do not have an income tax and their property taxes are still 2 or 3 times less than Texas.

Who says it's "affordable"? Name names.

What are these "hidden costs"? The fact that (for most people) the property tax is 2.4%-2.8% is reported often. It's not hidden nor a surprise.

99.9% of the people who live in Austin do not live on a 5+ acre lot.

We pay for our schools thru property taxes. It's an expense that we buck up & pay....especially if we have school age kids.

I would move to Vegas or Seattle.....their property taxes are 2-3 times less. Why do you "really want to move to Austin"?

[scm53]

Originally Posted by American JP

People say its because there is no state income tax but Seattle and Las Vegas also do not have an income tax and their property taxes are still 2 or 3 times less than Texas.

Washington has sales tax that can range up to 9.1%. Nevada has gaming taxes, and an astronomical lodging tax. Sales and excise taxes combined are approximately 1/3 higher in these two states than in Texas.

[hoffdano]

Every state has its own unique way of collecting enough money to operate the state and local governments. Texas' formula relies on sales tax, a business gross receipts tax, and property taxes. Washington has a similar approach. Nevada derives a huge portion of its revenue from taxes on gambling. One aspect of Texas' approach on property taxes that is somewhat impactful is that property taxes are collected and spent and the local level. There is one exception to that - a portion of property taxes in "wealthy" areas is ridistributed by the state to supplement school property taxes in poor areas. The property tax is not a state income tax.

The Tax Foundation website says Washington's per capita property tax collection is $1257 per person, not much less than Texas' $1562. I would guess an average salaried Austin home owner pays about $7500 per year (I guessed at 2.5% x $300,000).

The OP's comparison to Seattle (or Washington state) is not as favorable to Austin as most cities. Zillow says Seattle housing though is significantly more expensive than Austin - median price of $429,900 vs. $229,800.

[Tall Traveler]

I lived in Texas for 8 years and now more than that in Washington. People say that Washington has a higher tax burden but I don't see it....it seems like it's better with lower property taxes and also no income tax in Washington. The one think I think that Texas has better is university support...I think Washington saves a lot by withholding much support to their universities.

The super high property taxes is probably the biggest reason I don't want to go back to Texas when I retire.

[hoffdano]

Texas property taxes are higher than average nationally, but they aren't as "super high" as New Jersey, Illinois, or Connecticut (for example).

It is also especially important to look at the actual $$ spent every year on property tax, not just the rates.

[10scoachrick]

AND you can do things like live in a more modest home to keep your taxes down. Our downsizing move is saving us $5000/yr JUST in real property taxes!

[HappyTexan]

And it's not high in all of Texas. The more local services you have the higher the taxes.
I moved from the Austin area further east and my property taxes now are 1/3 of what I payed when I lived near Austin.
It's not just schools that are in your property tax bill.

The question I guess comes down to whether you want to move to Texas or do you want to move to Austin.

[hound 109]

Originally Posted by HappyTexan

And it's not high in all of Texas. The more local services you have the higher the taxes.
I moved from the Austin area further east and my property taxes now are 1/3 of what I payed when I lived near Austin.
It's not just schools that are in your property tax bill.

The question I guess comes down to whether you want to move to Texas or do you want to move to Austin.

But schools do represent 60-75% of most property tax bills (& are probably the biggest reason our property tax bill is higher than it is for folks coming from other parts of the country). If one's kid is getting a private school quality education, it's definitely worth it (if not, I'm not sure why anyone would want to seek out such an area?)

& I agree that one can search & find homes in Texas with much lower property tax %s in texas & (more importantly) much lower property tax bills. Once my kid is out HS, I will also escape the tax burden caused by the excellent schools (which I no longer will need), the ever increasing $$ needed to support (& build the infrastructure for) suburban growth & also to escape the loony toon decision makers in city govt. & county govt.

(Could you see Burnet, Bastrop or La Grange city councils discussing the need for statues for the homeless, or subsidized housing (when cheap housing already exists?) or a choo choo train that costs hundreds of millions that less than 5% of the people will ride & doesn't significantly FIX anything?)

Plus, homes themselves are alot less (because the dirt is worth less) once you get past the exurbs & into smaller town, county seat texas.