Relocating from Alberta to Houston (Galveston, The Woodlands: insurance, relocation company, mortgage)

[hugtam]

I'm debating an offer to transfer from Edmonton, Alberta to Houston and have tons of questions. I'm hoping others who have made the move can give me some insights.

I'd probably be looking at buying in or around Katy since the office is in Briarpark and I've also heard Katy has one of the best school districts in the country. At first glance I could sell my 1000 sq ft bungalow here and buy a palace there but what about the other costs? property taxes, state taxes, federal taxes, utility costs, hidden fees, medical, dental, etc. The exchange rate being pretty much equal does anyone have a best guess at the overall cost of living difference for a middle class family of 4? (I've seen estimates ranging anywhere from 70% to dead even)

Any info would be greatly appreciated.

[snappy]

I made the move and am back now. I can give you some ideas. Are you being relocated by your company and therefore will have medical and dental benefits provided by them. I did so can't help you regarding that. We paid up front and submitted everything for reimbursement. Can tell you there are NO waits to get into see family docs like here and there are tons of them. They have to actually be nice to you because of the competition!!

Our company also "equalized" our taxes so we were paying much as if we would have in Alberta. Unfortunately. Because as I'm sure you know taxes are less down there. There is no state tax and federal is lower than here. However we also got many allowances to try to equalize everything.

Utilities are higher because of the air conditioning which is critical. You can't live without it. Even if you like heat you have to have AC on to dehumidify or all your stuff will rot!! I paid close to $500 a month for electricity some summer months. Other utilities are similar. Its good to have low water ground cover not grass in your yard to minimize need for watering in the summer.

Property taxes and insurance are way higher. $345,000 house cost us close to $10,000 a year in taxes. That is in the Woodlands which I know is high but not sure how Katy area compares. Insurance ran around a $1000 a year and here I pay $600 for a smaller house and WAY smaller yard.

On the plus side as you mentioned you can buy up, way up. Our house in the Woodlands which is an expensive area cost $345,000 when we sold in '05. It was 3000 sq ft, 32,000 gal pool, 29,000 sq. ft yard. Our current house in Calgary is 2500 sq ft and the yard about 8,000sq ft. Could probably list for between 7 and $800,000.

Watch out for the best schools in the country selling lines. We were told that about the Woodlands schools and while I was perfectly happy with them (son in school there grades 4-11 and in public school) they are not as good as Alberta schools. I saw this both going there and coming back in my sons grades and amount of homework. He did nothing (really) there and maintained 90's and here he had to work hard for them. Having said that he is in University now in Engineering so did it hurt him? No not at all. I really think that too much emphasis is placed on grade school and parents go crazy trying to get "the best". Now that applies in my mind to normal kids who do not need extra attention or extra challenges. That was mine so that is what I know. Now obviously there are places you do not want your kids to go but most of the suburban Houston school systems in my opinion are fine.

Hope this helps and if you are looking for advise I would say do it. I had a hard time getting used to it but that only took a year or so (I don't like heat, snakes, lizards, being called ma'am - and trust me those are a given!!) I really enjoyed my time there and would move back to the Woodlands in a heart beat and may buy a place there to spend winters when we retire.

[Sourvino]

My family made the move from Calgary almost 2 years ago.

We chose The Woodlands and absolutely love it here.

The relocation company that we worked with had done a report that said that a salary of $100,000 (to provide a round number) in Calgary would be equivalent to a salary of $68,341 in Houston (and that was at .83/dollar). That sounds confusing...what they were basically saying is that if you spent $100K/yr in Calgary then the same lifestyle in Houston would cost $68K/yr. This was heavily influenced by the associated costs of owning a 3,000 sq. ft. home in both cities.

I would say that it is hard to directly compare the two because we definitely upgraded our lifestyle here (bigger house, lawn care, cleaning service, two newer cars, pool, etc).

I have 3 children ranging from 5 yrs to 3 months. We spend so much more time outside here (year round) than we did in Calgary. The summers are VERY hot & humid, but not unbearable compared to a Western Canadian winter.

We only meant to come here for 3 yrs, but are considering not going back at all.

Some of these are things that Snappy already covered, but:

1) Property Taxes

The property taxes are a tough pill to swallow, but you still come out way ahead on the tax situation. In Calgary I was paying about 42% of my paycheque to taxes (including CPP, Medical). On top of that we were paying about $3K in property taxes.
Here I am paying about 28% of pay in taxes (including OAS, Medical), plus I have a $10K property tax bill. There are two "hidden" issues actually working in your favour down here...

A) the mortgage interest (if you choose to have a mortgage) is a tax deduction (at your tax rate, like an RRSP deduction)
B) The property tax is also a tax deduction...
Can you believe it (tongue firmly in cheek) American's don't need to pay taxes on their taxes. It isn't a true dollar for dollar deduction, but it does make a difference.

2. State Taxes
In Alberta we had the flat 10% income tax which was good. Here they make their income on property taxes so you control what you pay (sort of) by the house you choose to live in.

3. Federal Taxes
Similar, but the U.S. rates allow more income before you hit them. Example: In Canada any income over $123K would be in the top federal tax bracket (29% still?).
In the U.S. that income would still be in the 25% bracket, and any other income up to $195K would still be only 28%. Then there are two more brackets after that still...
WARNING: If the Democrats win the upcoming election there will probably be far fewer advantages to living in the USA over Canada...you may even want to wait and see what happens with that first.

4. Utilities
Utilities were really not that different. My wife pays them, but the big difference is that winter is the cheap part of the year and summer costs more. Electrical I think is slightly more, gas is less (even with the pool). Phone/Internet are exactly the same. I can get you actual numbers; if you are interested let me know.

5. Hidden Fees/Issues
Hmmm. We weren't used to Home Owner's Association fees, but we just lump them in with the property taxes.
There is a lot of concern about the cost of gas here, but it is still cheaper than it is in Canada.
Food is slightly cheaper here for most things.

6. Medical/Dental
Everything is completely different. Some good. Some bad.
Most Oil & Gas companies have pretty good employee plans. For a fairly high monthly fee you get subsidized health, usually with some sort of "cap" on your annual costs.
The fee is fairly high, our portion is around $300 month which is small compared to what the company pays. This is the cost for our whole family (Medical/Dental/Vision). Generally there is a "co-pay" of $20 for any doctor visit. Everything has an associated cost, which you pay a set percentage or set amount of, until you hit your annual individual or family limit. Each plan is different. If you want more details on any of it let me know.

That's the "bad" part (italics are because I think a co-pay would be a great addition to the Canadian healthcare system...might help fix it even...). The good part is that the level of service, and the availability of that service, is something that actually takes some getting used to. When we were looking for a pediatrician my wife would phone and ask for an appointment and they would say, "how about later today?". She was in stunned (happy) disbelief over how great it is. The medical practitioners don't even make you feel like they are doing you some kind of great favour by taking your money...they make you feel welcome and everything...

I can't go on enough about how great the medical care had been down here. You definitely get what you pay for...in this case you are just paying the insurance companies instead of the government.

If there is anything else you need to know, I'd be happy to try and help.

P.S. I'm not sure how old your kids are, but we did have one minor issue with Kindergarden down here. My daughter turned 5 at the beginning of November, but she wasn't allowed to start Kindergarden that year. They were VERY strict about that. It means that if we go back to Canada she will be 1 grade behind all the kids she was friends with before, but there are also advantages to being a little older than most of the kids in your class too...so we'll see.

Take care and good luck!

[EasilyAmused]

If the OP is working at Briarpark, don't send him to The Woodlands. The pine trees aren't worth it. Besides there're great big Oak trees very near where he is working, as well as excellent schools in those neighborhoods.

[Sourvino]

I should qualify anything I say about The Woodlands by saying that I live AND work there...so the commute is not an issue...but for a young family I just can't imagine a better place to live.

With our kids being so young we also hardly ever leave "the bubble" to go into Houston proper (the Zoo and Kemah/Galveston are about the only reasons).

I didn't mean to sound like an expert on Houston locations...just have some recent experience with the move from Alberta.

I would definitely try and live as close as possible to where you work.

[philster001]

Taxes will probably run you 3.00-4.00 per $100 value, so for a $200,000 home, at 3.25 property tax rate you will pay $6,500(possibly a bit less for exemptions if you qualify). Electricity will be around 250-400( if you buy more than 2500 sq feet) in the summer. Especially if you aren't used to hot humid weather. Gasoline is around 3.70 a gallon.