homeowners: does the no state income tax offset the high property taxes?

[GANKS]

Originally Posted by Jazzedforhim

RIGHT ON! That's a big plus for us since we pay state taxes here and cannot write off sales taxes! Yipiee!

Sell house, sell!

Don't get too excited. The sales tax schedules are pretty weak and unless you are saving your receipts you will probably write more off on your income taxes - there is no sales tax on food.

If you are really watching your receipts, I recommend getting your gas receipts with the taxes itemized out so you can use those too - they add up.

[Jazzedforhim]

Originally Posted by GANKS

Don't get too excited. The sales tax schedules are pretty weak and unless you are saving your receipts you will probably write more off on your income taxes - there is no sales tax on food.

If you are really watching your receipts, I recommend getting your gas receipts with the taxes itemized out so you can use those too - they add up.

Oh yeah, I am the queen of organization. Saving receipts...no problem! We purchase a lot of durable medical supplies too that will add up.

[Austin97]

Originally Posted by Jazzedforhim

Oh yeah, I am the queen of organization. Saving receipts...no problem! We purchase a lot of durable medical supplies too that will add up.

We use a credit card that downloads to quicken so we have every single transaction.

[Tami Malin]

If you are looking at a $180,000 Mortgage on a 1700 sq. ft. home in Austin and looking at the same home in California for $540,000 the difference in Property tax can be huge! For instance..
$180,000 home x 2.80% tax rate = $5,040 per year V.S.
$540,000 home x 1.5%(?) tax rate = $8,100 per year.

Which would you rather pay?

Not to mention the fact that we do not pay state taxes on our paychecks.
You might want to look into Auto & Homeowners insurance rate differences as well.

Austin's home market has grown an average of 11% in value over the past year according to PMI magazine. You taxes might increase but obviously so will your equity.
Good Luck!

[austin-steve]

does the no state income tax offset the high property taxes?

For most people, no it won't. Not on houses of comparable value. But as others have pointed out, it's a variable equation depending on your level of income, where you're coming from (the costs against which you are comparing), etc.

I ran the numbers a few years ago comparing a $350K home in Arizona to a $350K home in Austin and using a $100K annual salary. The additional income taxes in AZ were far lower (about $800/yr. if I remember) than that higher property taxes in Texas. It wasn't even close.

Steve

[tashina]

I think it depends mostly on three things. Salary and when you bought your California house and where that California house was (Victorville or San Rafael).

For us, it was very cost beneficial to move to Austin. For some others, not so much.

If you have a pretty good wage in California, are commuting in from a lower cost of living area nearby and have lived in your house for years, then you may not see much savings (for example, my dad's house, bought in 1965, was worth $350k but carried only $350 per YEAR in property taxes).

If you work for a company that will pay the same wage as your California job (my husband was contacted just today about a job with a choice between Plano and Los Angeles with the same pay in both locations), you have a newer house and live in an expensive area, then you are in the best position to benefit from a move.

We looked at it this way. In Dublin, CA, where we lived:
3000 sq ft house - new - in nice area with a view - $1.25 million X 1.25% tax = $15,625 per year

In Austin
same quality, same size house - new - in a nice area with view - $350k x 2.5% = $8750.

California income tax was about $3500. So, California = $15,625 (if I could have afforded it) + $3500 = $19,125.

$19125 minus Austin prop tax of $8750 = $10375 per year savings.

Bottom line is there is no one answer. You have to look at your situation.