What's Up with the Property Taxes? (Houston, Dallas: rent, mortgage, cheap house)

[WRM20]

Originally Posted by mkwensky

Basically it's a 20% discount on property tax on the home you live in.

That depends on the taxing entity. Houston ISD is the statutory amount($25k?) plus 20%. Other school districts only give the statutory exemption. Same thing with counties and cities.

[chris_ut]

Property tax varies widely in Houston metro. In the loop you are only 2.4% whereas far out suburbs may be 3.6%.

[timtemtym]

Originally Posted by RG1981

I see what you're saying, VAF. The thing is that I'm barely getting by here, so I was hoping to go elsewhere and get a little more breathing room, but after doing all the long division it's probably just better to stay put.

We moved from Irvine this summer. With our combined incomes, the property tax on the house we bought in Houston was equal to just over half what we were paying in CA state income taxes, so for us it worked.

We are planning to spend a few years here and then head back to California.

The reason for moving wasn't about taxes, we needed to be near family for a bit. Our job needs only require us to be near a good airport. The tax savings were a bonus.

[Caro42]

Originally Posted by RG1981

Being that I live in Southern California, it's my duty to—once or twice a year—swear that I'm leaving this cesspool for Texas, never to return, and bla bla bla.

After looking into the Houston area for a while, I'm floored by the property taxes that you guys are paying. They're actually more expensive than what I'm paying in Orange County, CA, in some cases even double or more!

Not to criticize or anything, I'm genuinely curious...what gives? I thought Texas was supposed to be the refuge for folks sick and tired of this type of thing.

The property taxes in Houston are not as bad as the property taxes in Katy and Richmond, which are appalling. Actually, it's taxes imposed by something known as the MUD districts, and they have a license to steal. The MUD district taxes are over and above the standard property tax, and literally double what one pays to the county for the standard property tax. The MUD districts are water related - they deal with improvements made to drain the area and control flooding. If you pay $3000 in taxes to the county, you will pay another $3000 to the MUD district, for a total tax liability of $6000+. That is a typical amount for a $300,000 house. I have seen taxes of $12,000 a year on a $350,000 house in Richmond.

Remember that the taxes you see quoted on realtors websites are without exemptions. You get about twenty percent off if the property is your homestead. More if you are over 65. So, if you plan to live in the house you buy, you file for a Homestead Exemption, which will definitely lower your tax liability.

Having said all that, I'd trade this furnace for southern California any day. The only reason I don't live there is that what I paid for a four bedroom, new, 2-story, all-brick house with a beautiful front and back yard in a really nice subdivision of Katy, TX, would probably only buy me a garage apartment in L.A.

[resonator]

Right you are about MUD. I remember years ago when I moved into a new subdivision there were three mobile homes not too far away. They housed the three MUD directors (appointed by the subdivision developer). After 5 years or so they go away and the home owners can elect their own. The MUD borrowed money to pay for infrastructure to bring in water, take it away, and keep the pumps running and the chlorine working. No telling how many kick backs are involved with the legal work, bond issuance, finance companies, and actual construction. The costs are truly astounding and that explains the taxes. Oh, you still have a water and sewer bill unrelated to the annual tax.

There was a minor scandal in a little town near Houston some years ago. The MUD was able to appoint security folks and grant them peace officer status even though they were just friends of the developer. That was back before easily available weapon carry licenses. Nice ! Those guys would even ride around in their personal cars but in uniform and hassle people.

The exemptions on my homestead+65 tax bill are a bit confusing. Some of the many line items stay frozen (property value and/or tax rate). Other items are not exempt at all. There must be a dozen different taxes on my annual bill.

Not that it matters, but I think the bill you receive in 2020 is for the next year's taxes. And they want payment when billed, but offer some time extension payment options.

[WRM20]

Originally Posted by Caro42

The property taxes in Houston are not as bad as the property taxes in Katy and Richmond, which are appalling. Actually, it's taxes imposed by something known as the MUD districts, and they have a license to steal. The MUD district taxes are over and above the standard property tax, and literally double what one pays to the county for the standard property tax. The MUD districts are water related - they deal with improvements made to drain the area and control flooding. If you pay $3000 in taxes to the county, you will pay another $3000 to the MUD district, for a total tax liability of $6000+. That is a typical amount for a $300,000 house. I have seen taxes of $12,000 a year on a $350,000 house in Richmond.

Remember that the taxes you see quoted on realtors websites are without exemptions. You get about twenty percent off if the property is your homestead. More if you are over 65. So, if you plan to live in the house you buy, you file for a Homestead Exemption, which will definitely lower your tax liability.

Having said all that, I'd trade this furnace for southern California any day. The only reason I don't live there is that what I paid for a four bedroom, new, 2-story, all-brick house with a beautiful front and back yard in a really nice subdivision of Katy, TX, would probably only buy me a garage apartment in L.A.

MUD taxes can be high in the beginning. My parents have lived in Katy since 1982, and the MUD tax rate for them is $0.30, which is less than the $0.63 Harris County rate. With the MUD, you may pay taxes, but that's better than adding $30k to the price of the house to pay for the infrastructure. Counties in Texas don't generally provide sewer and water services, or trash pickup. The MUD's do all of that.

The big tax bill comes from the school districts. Katy ISD tax rate is $1.44, and the homestead exemption is $25,000. The County may grant a 20% homestead, but Katy ISD doesn't.

[Dopo]

Originally Posted by RG1981

Just on principle though, it seems pretty counter intuitive. What sense would it make to move to escape taxes...only to pay more taxes? Yes, I understand the income tax doesn't exist, but the bottom-line savings is diminished substantially by the property tax when it comes to housing.

That’s the definition of an “idiot”

[NORTY FLATZ]

While taxes are a concern, I'm sure for some Texans, Laura is going to bring bigger problems, in about 3 or 4 hours...

Y'all got boats? Some of you are gonna need 'em.

[Need4Camaro]

I thought you had to be age 65 + to qualify for homestead exemption. What is the drawback of taking the exemption? Can’t understand why they would offer that to everyone... kind of like saying ‘Hey would you like to pay more taxes or less taxes?’

[WRM20]

Originally Posted by Need4Camaro

I thought you had to be age 65 + to qualify for homestead exemption. What is the drawback of taking the exemption? Can’t understand why they would offer that to everyone... kind of like saying ‘Hey would you like to pay more taxes or less taxes?’

The exemption is larger at age 65. Homestead exemptions are available to anyone on their primary residence, regardless of age. They are not available to businesses.