Possible Summer '08 move to Houston Area - Scared to Death of Property Taxes... (Sugar Land: condo, second mortgage) - Texas (TX) - City-Data Forum

tidefan · 12-26-2007, 11:52 PM

Possible relocation from Birmingham, AL area to Houston in Summer '08. We have a $225k house here in Birmingham area and the property tax for this year was just over $800. Looking at the property tax rates in Houston, it seems as though you will be paying a second mortgage just to pay property tax. I know that TX doesn't have a state income tax, but on that level of house, it comes to $7,875 at 3.5% of your house value. That is still $3,000 higher than what I paid in Income + Property here in AL. How much does the homestead exemption cover?

Secondly, what is a MUD? This is a bit confusing, even reading websites that tell you what it is. Does your MUD tax cover your water and sewer bill? I do pay about $50/month for that here in Birmingham (it is not included in Property taxes).

Thanks for the help!

EasilyAmused · 12-27-2007, 07:43 AM

Just don't move somewhere with MUD taxes or an area who's taxes are at 3.5%, its that easy. Homestead exemptions will reduce the bill a fair amount. No we don't have state or intangible or automobile taxes. The taxes you pay here are for both the property and the school, around 50% of the total bill for each. So educating 2+ children for 3,500 is a pretty good deal.

Mom2Feebs · 12-27-2007, 11:21 AM

Quote:

Originally Posted by tidefan

Possible relocation from Birmingham, AL area to Houston in Summer '08. We have a $225k house here in Birmingham area and the property tax for this year was just over $800. Looking at the property tax rates in Houston, it seems as though you will be paying a second mortgage just to pay property tax. I know that TX doesn't have a state income tax, but on that level of house, it comes to $7,875 at 3.5% of your house value. That is still $3,000 higher than what I paid in Income + Property here in AL. How much does the homestead exemption cover?

Secondly, what is a MUD? This is a bit confusing, even reading websites that tell you what it is. Does your MUD tax cover your water and sewer bill? I do pay about $50/month for that here in Birmingham (it is not included in Property taxes).

Thanks for the help!

3.5% based on your tax value. Keep in mind that the number is usually not what you pay for your house. It is usually 10-20% less than market value, and like EA mentioned, you will be able to claim a homestead exemption next January, which will be another 20% off the tax value. An example:

We could have sold our condo this summer for around $120-$125K (based on comps). Harris County Appraisal District has a tax value on our place of $103,000. Because we claim a homestead exemption, the tax value is actually $91,000. We live in Spring Branch ISD, City of Houston, with NO MUD (thank goodness). Our tax rate is $3.12. We only pay $236 a month in property/school taxes. Not bad for sending our kids to an exemplary school, having our infrastructure completed and paid...and three gorgeous parks near us....not bad at all! My maintenance fee here is more expensive than that, and I can assure you we get a lot less! LOL!

tstone · 12-27-2007, 01:51 PM

3.5% is a big overestimate. The most expensive areas for taxes may run you 3.2%. My area is taxed hardcore, but this year we were only at 2.9%. They gave us some (likely temporary) relief from the school taxes. The rest didn't change.

The homestead exemption reduced my taxable value about 20%. There is a cap on the amount the exemption can be though. Moral? Don't buy too big a house just because the principal + interest payment looks small. Everything else you have to pay for can very easily burn a hole in your pocket.

tidefan · 12-27-2007, 11:40 PM

Quote:

Originally Posted by tstone

3.5% is a big overestimate. The most expensive areas for taxes may run you 3.2%. My area is taxed hardcore, but this year we were only at 2.9%. They gave us some (likely temporary) relief from the school taxes. The rest didn't change.

The homestead exemption reduced my taxable value about 20%. There is a cap on the amount the exemption can be though. Moral? Don't buy too big a house just because the principal + interest payment looks small. Everything else you have to pay for can very easily burn a hole in your pocket.

Thanks for the info. When I look at builder websites or hcad, it looks as if a lot of the taxes are in the 3.3 to 3.8 (also Bridgeland at 3.98???) range. I guess I am a bit confused as to what actual tax rates are.

One other question, do you pay your property taxes via escrow through your mortgage company, or do you pay separately?

Mom2Feebs · 12-28-2007, 07:33 AM

Just know that in a new (or newer) subdivision, your taxes will always be higher. I would never pay 3.98. That's just insane. Shadow Creek Ranch in Pearland was the same way--but the taxes were around $4.05--finally people protested enough and they were brought down a little...but dang, that's just a LOT of money, IMHO. New subdivisions like Bridgeland are very nice so they will always attract buyers and I guess that's just the price you have to pay to live there.

Most mortgage companies will roll your escrow into your mortgage payment, but as has been the case with us and Chase Mortgage, we have to stay on top of our tax rate b/c they've screwed it up twice in 5 years.

Wysiwyg · 12-28-2007, 08:22 AM

scared of property taxes? hmm we were more scared of the cost of electricity during our move

EasilyAmused · 12-28-2007, 08:31 AM

Taxes in the xburbs are steep. The MUD tax on top of it all is the kicker for me. Moving into an established neighborhood, with a Houston address, will keep your taxes lower. Montgomery county often taxes at 100% of the market value in the newer areas. Yikes! Harris County has my market value about 40% lower than what it will sell for. But I ain't gonna tell them that.

Rick4Life · 12-28-2007, 08:45 AM

Check out Old Orchard in Richmond/Sugar Land. Taxes will be 2.5% for 2008.

wereinhouston · 12-29-2007, 07:10 AM

We moved from Seattle, and yes the property taxes are more than double. However, the home we bought in Spring was Brand new (as compared to our 55 year old) and cost about 50K less. Meaning the tax has a lower basis. That helps. The other thing is, get into one of the top school districts (Klein is where we are, but CyFair, Katy,and Humble are all very good choices) and you are getting something for your tax dollars.