I think I've got this tax thing figured out - am I right? (Dallas: sales, mortgage)

[thinkingaboutaustin]

OK - I've read every post with "tax" in it - I think I've figured this out -

I come from a state (MD) with property tax and state and local income tax (I currently pay state, county, and city taxes)

From what I understand, my paycheck will have the typical federal stuff taken out, but nothing to the state.

The only tax I would pay to any state/local entities would be based on X% of my property value (somewhere between 2-3% depending on where I live).

So - in my current area, I'm paying about $15K per year between state taxes and property taxes.

Assuming that if I move to austin, I pay less than that in property taxes, I would be ahead.

Plus, the higher sales tax is federally deductable.

My questions are:

1) am I correct?
2) what am I missing? I see complaints on high taxes, but based on my estimates, I'd pay around $11K in property taxes, but I currently pay $15K where I'm at - seems like a bargain.

thanks!

[AustinGuy]

Sounds like you got it right. What tends to annoy Texans is when their property values get raised via reappraisal year and year making the property tax go up while their salaries stay fairly consistent.

[Taterhead]

It's bargain until you want to retire in Texas. I just read on another post that many Texans that have lived there for 20-30 years will not retire there because the can't afford the property tax on their home when they are retired.

Debbie

[atxcio]

That seems like a pretty accurate analysis to me. Property taxes are something you need to "manage", too, by making sure you get that homestead exemption immediately (limiting your increase to 10% per year) and being prepared to protest a large increase every year. So there is some time involved. $15K property taxes in Eanes or Austin (city) would be about what you pay on a $700K house.

But as other posters have mentioned, the real potential problem appraisal values (and hence net prop taxes) rising much faster than your income. And if you are retired, it's not a good deal.

[HappyTexan]

Originally Posted by Taterhead

It's bargain until you want to retire in Texas. I just read on another post that many Texans that have lived there for 20-30 years will not retire there because the can't afford the property tax on their home when they are retired.

Debbie

If you stay away from the I-35 corridor cities your tax rate drops so it's not impossible to retire here..just more expensive if you want to stay in the high priced counties.

[compSciGuy]

Property taxes should be capped when your 65 or so, although laws always change. My dad retired in Texas (and then went back to work), but I would assume many retired people also have growing residual income (to pay for retirement, etc.) that they don't want to pay state taxes on either. Property taxes are also consumption based, so if somebody want a pricier house in an expensive neighborhood, that something that's their choice.

[CarnivalGal]

I come from a state that has income tax as well. In the long run, it pretty much evens out. But like everyone is saying, you can pretty much count on your property taxes going up 10% every year. I can see where retirement is near impossible for a lot of people. We are in our mid-late 30's and bought our house 3 years ago. We love our house and intend to die here. However, it will not be long at all until our property tax payments are more than our mortgage payments - like within 5 years or so.

Another thing to keep in mind is the sales tax. It is one of the highest in the country (8.25%), and things that are not taxed elsewhere (like clothes and certain foods) are taxed here.

[tibbar]

You can go to paycheckcity.com and see how much larger your check would be in Texas. We moved from a state where they tax income, all food, and all your personal property(not just your home).

As for retired people....one home I know of in Westlake where the couple are in their 80's has a Taxable Value of 1,906,329.00 on a Market Value of 4,314,925.00 Last year taxes were $45,000

[mimimomx3]

Originally Posted by AustinGuy

Sounds like you got it right. What tends to annoy Texans is when their property values get raised via reappraisal year and year making the property tax go up while their salaries stay fairly consistent.

- and the fact that we get whole new taxing authorities created, like the Travis County Hospital Taxing District. http://www.traviscountyhd.org/downloads/sp_bo_.pdf (broken link)

[love roses]

My grandma lives in Smith County and says her taxes are surprisingly low and she lives on 20 acres. So I guess I'm seconding HappyTexan. Smith County isn't on the 35 corridor, although it's not terribly far from Dallas.