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Texas is about 33 or 34th lowest in aggregated state + local tax burden. I will say this, from a tax perspective Texas is less than great for lower earners.
Agreed. Once you start making 6 figures or more, TX is a very attractive state. That 33/34th tax burden ranking is probably figured using the median state household income as well. So for higher earners, it could be an even better deal.
Looking at homes in the DFW area (Grapevine, Southlake, TC, Colleyville etc) looks like property taxes are running over $10k per year on most of the mid level homes ($400k-$500k). Is that accurate? It just seems extremely high to me and yes I know there is no state income tax but still...jeez. We were planning to move to escape NC income tax but looks like that will mostly be eaten up with property taxes and only save a couple thousand a year.
Property Taxes are EXTREMELY UNFAIR to newcomers!! When I closed on my home in 2018, I piggybacked off of the previous owner’s appraisal. The next year’s appraisal was based on the purchase price, some $81k more than the previous appraisal. Next year is 10% more than that (the state max). Meanwhile, my “deadbeat” neighbors who live in similar size lots/homes are allowed to pay off an appraisal between $125-150k less simply because they’ve been there so long. I can’t even deduct the entire property tax assessment due to the stupid Trump tax. It sux even more that the $10,000 limit doesn’t even adjust for inflationary property tax assessments.
I am appealing this increase and am hoping for the best.
Last edited by Hopeful for Life; 01-03-2020 at 05:53 PM..
Agreed. Once you start making 6 figures or more, TX is a very attractive state. That 33/34th tax burden ranking is probably figured using the median state household income as well. So for higher earners, it could be an even better deal.
State Sen. Bettencourt of NW Houston (former longtime Harris County Tax Assessor-Collector) has been championing the recently passed property tax reforms. He was saying that Texans won't have to worry about the Federal Tax deduction-reduction since the average Texas homeowner rarely sees taxes that high.
If those taxes exceed $10,000, then you will lose the federal government match on your federal taxes (thanks to Trump's tax scam!). I would be surprised to see a bill that high in Texas, but OP $400k-500k seems to be the price point that usually creates that corresponding annual bill in the more developed blue states in the north and out west (looking at you California!!!).
Quote:
Originally Posted by wheelsup
I had not considered Nevada/Vegas. Looking into it now you are right. Very low property taxes and no income tax, and located just a few hours from LA. Interesting.
And no economy to speak of except mooching off of the fumes of California. Vegas is more like a donut--the suburbs are home to goods and services for residents, and the center is where the town profits off of tourism (but locals stay out unless they have guests staying over).
There are nice houses in the outskirts in every direction, but no professional corporate office type jobs to speak of (note the lack of major clusters of office buildings--a.k.a. a central business district skyline). The affluent is made of skilled service workers such as doctors, nurses, dentists, lawyers, etc. and nothing else. The rest rely on casino industry or lower-skilled office work in the suburbs. Very similar to Miami and Orlando!!!
If you're retired and on a pension, independently wealthy, or have a skill and get licensed in Nevada, then Vegas is for you. Just don't live there if you have a pre-existing problems with the vices the tourism industry promotes! Though your kids may not turn out right if you raise them there with those vices on display.
Don't compare TX to NC. If you say "well, it's not like North Carolina", then in all honesty you should stay in North Carolina.
There are many things I preferred about North Carolina (scenery, beaches/mountains, roads/driving, houses in that $400K price range), but there are many things I prefer about North Texas (weather, schools, shopping, people).
You are right about the people. I do like the people around Dallas much more and all up into the Midwest.
Property Taxes are EXTREMELY UNFAIR to newcomers!! When I closed on my home in 2018, I piggybacked off of the previous owner’s appraisal. The next year’s appraisal was based on the purchase price, some $81k more than the previous appraisal. Next year is 10% more than that (the state max). Meanwhile, my “deadbeat” neighbors who live in similar size lots/homes are allowed to pay off an appraisal between $125-150k less simply because they’ve been there so long. I can’t even deduct the entire property tax assessment due to the stupid Trump tax. It sux even more that the $10,000 limit doesn’t even adjust for inflationary property tax assessments.
I am appealing this increase and am hoping for the best.
Unfair is a cry which belongs to a certain age group.
You did not do your diligent research prior to purchasing a home. Good realtor? Your neighbors are deadbeats because hey have smaller houses on smaller lots with lower tax assessments? They use everything you can - homestead, age, disability, ... .
What would your income tax be in your previous state at current income versus property tax in Texas?
The OP has the benefit of being a high earning major airline pilot, so commuting is always an option. I certainly wouldn't plan on doing it long term, but I suppose not everyone can get hired with the airline with the convenient domicile of choice one wants. I digress.
Texas works for me (mil pilot) because I undershoot my housing choices. It's a sliding scale, but I got curious so I plotted it. Granted, I made a bunch of linearizing assumptions.
At any rate, when looking at combined income tax and property tax liability against Texas, plotting against property value (for tax assessment) and then sliding the resulting curve as a function of the second variable (income), it quickly became clear that the income threshold needed to overcome the property tax liability of texas is very low. For the property costs I incur in Texas (190K before exemptions, but call it 200K for rounding), circa 45K. Anything higher and you're better off in Texas. At that property value and my HH income, my tax burden more than doubles in OK and LA.
Even for the OPs more expensive standards, at 400K prop values the income value on the curve to be within roundoff error (less than 1000 bucks a year) for total liability is a measly 88K. That's low, and probably close to half or a third what the OP is pulling. Adjust up to the incomes we're likely talking about (150-300K+) and it's no contest, you're ahead paying for property taxes in Texas.
The non-quantitative merits of a move from Raleigh to DFW are a subjective thing, to include the perception of quality of life as a function of housing dollar needed. I can't adjust for that in a graph since it's a personal predilection.
Now, all that said, there's a very good point brought on by the OP: There's a second tier effect about states without what I call "property tax dampening". States with income tax generally offer that benefit by proxy, due to having a bifurcated tax source system (majority income + property), whereas the no-income tax state has to go really regressive (property-only or property and high sales tax) in order to attain the same level of revenue. IOW, even if the tax burden was the same, the person with the non-bifurcated tax liability could very well get gentrified out of his shelter during a life stage of lowered W-2 income or retirement. That does him no good even if it saved him the indignity of income taxes during working life. That's where the false economy of paying all your taxes in the form of property taxes could rear its ugly head, especially for the "400K is the minimum value for a dignified standard of living in urban america" crowd.
Last edited by hindsight2020; 01-04-2020 at 01:48 PM..
Looking at homes in the DFW area (Grapevine, Southlake, TC, Colleyville etc) looks like property taxes are running over $10k per year on most of the mid level homes ($400k-$500k). Is that accurate? It just seems extremely high to me and yes I know there is no state income tax but still...jeez. We were planning to move to escape NC income tax but looks like that will mostly be eaten up with property taxes and only save a couple thousand a year.
Look for something in Tennessee (Nashville area) where there is no income tax and property taxes are reasonable. Move to Williamson or Wilson county for schools. We moved to DFW two years ago and have regretted it every day since. I did the due diligence regarding property taxes, healthcare, sales tax, etc and income was adjusted accordingly, still.... it's generally more expensive here.
Property taxes are ridiculous, and I'm surprised that a red state has such high taxes. The worst part for us is not financial, but more of a quality of life issue.
The landscape is so depressing, the weather is awful, the roads are atrocious and I haven't really met an abundance of gracious people. I really hate to be so negative, but, it has been heartbreaking for us to realize how unhappy we are here.
The OP has the benefit of being a high earning major airline pilot, so commuting is always an option. I certainly wouldn't plan on doing it long term, but I suppose not everyone can get hired with the airline with the convenient domicile of choice one wants. I digress.
Texas works for me (mil pilot) because I undershoot my housing choices. It's a sliding scale, but I got curious so I plotted it. Granted, I made a bunch of linearizing assumptions.
At any rate, when looking at combined income tax and property tax liability against Texas, plotting against property value (for tax assessment) and then sliding the resulting curve as a function of the second variable (income), it quickly became clear that the income threshold needed to overcome the property tax liability of texas is very low. For the property costs I incur in Texas (190K before exemptions, but call it 200K for rounding), circa 45K. Anything higher and you're better off in Texas. At that property value and my HH income, my tax burden more than doubles in OK and LA.
Even for the OPs more expensive standards, at 400K prop values the income value on the curve to be within roundoff error (less than 1000 bucks a year) for total liability is a measly 88K. That's low, and probably close to half or a third what the OP is pulling. Adjust up to the incomes we're likely talking about (150-300K+) and it's no contest, you're ahead paying for property taxes in Texas.
The non-quantitative merits of a move from Raleigh to DFW are a subjective thing, to include the perception of quality of life as a function of housing dollar needed. I can't adjust for that in a graph since it's a personal predilection.
Now, all that said, there's a very good point brought on by the OP: There's a second tier effect about states without what I call "property tax dampening". States with income tax generally offer that benefit by proxy, due to having a bifurcated tax source system (majority income + property), whereas the no-income tax state has to go really regressive (property-only or property and high sales tax) in order to attain the same level of revenue. IOW, even if the tax burden was the same, the person with the non-bifurcated tax liability could very well get gentrified out of his shelter during a life stage of lowered W-2 income or retirement. That does him no good even if it saved him the indignity of income taxes during working life. That's where the false economy of paying all your taxes in the form of property taxes could rear its ugly head, especially for the "400K is the minimum value for a dignified standard of living in urban america" crowd.
A 200k home bought 5-10 years ago is not a 200k home now. A 400k home in 2020 was a 250k home five years ago. Hardly a high end area. A 200k home in 2020 was 125k or so 5-10 years ago...hardly an area most here would want to live.
Look for something in Tennessee (Nashville area) where there is no income tax and property taxes are reasonable. Move to Williamson or Wilson county for schools. We moved to DFW two years ago and have regretted it every day since. I did the due diligence regarding property taxes, healthcare, sales tax, etc and income was adjusted accordingly, still.... it's generally more expensive here.
Property taxes are ridiculous, and I'm surprised that a red state has such high taxes. The worst part for us is not financial, but more of a quality of life issue.
The landscape is so depressing, the weather is awful, the roads are atrocious and I haven't really met an abundance of gracious people. I really hate to be so negative, but, it has been heartbreaking for us to realize how unhappy we are here.
I did look at Nashville at one time but really want to be able to drive to work and Nashville won't allow that.
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