Please clarify property taxes in the Woodlands or Imperial Oaks (Houston: fit in, HOA) - Texas (TX) - City-Data Forum

NCtoTexas · 03-02-2010, 10:31 PM

Hey there, I'm having an extreme case of sticker shock, so I'm hoping someone can clarify this...

Looking for a reasonable/modest house in The Woodlands or Imperial Oaks area. Something probably $250k or less. What I don't quite get is the property tax issue...

I'm reading that the tax rate is around 3.5%. Something's gotta be off with my math though, because ... well, on a $300,000 house, that would mean you'd be taxed at $10,500 per year. That's about $900/month. I've got a $350,000 house in NC, and I pay about $130/month in property taxes, or about $1600/year.

Is the Houston area seriously asking for property taxes that are around 7x higher? That's practically another mortgage payment...

What am I not understanding? Do people really pay $900/month in taxes? Or is there a case of like what we had in Vegas, where the houses are taxed based on an "assessed value", which was about 35% of appraised value... on a $250k house we paid about $1500/yr there.

I know there's no state income tax in TX, but there's not one in Nevada either, and their property taxes were about 1/5 as much, so -- I assume my understanding must just be wrong.

Anyone in Montgomery or Harris county with a $200k-$300k house willing to share what they pay in property taxes (and homeowner's insurance)?

Thanks very much!

LAM1010 · 03-03-2010, 01:27 AM

House is in the $200-$300K range. Paid $9000 in property taxes last year and HOA WAS $700.

ChocolateBabz · 03-03-2010, 07:50 AM

We are in Pearland but those figures don't seem 'off' to me.

Our appraised value $378,000

2009 Property Tax $12,306
2010 H.O.A. $1,445
2009 Home Owners Insurance (inc) TWIA $2,836

fordlover · 03-03-2010, 08:31 AM

Your missing a few points. One is that Texas brings most of it's income in thru Property taxes. Every state has to make income, and that's how Texas does it. There are states out there that have less expensive cost of living, but not very many, and certainly not North Carolina or Nevada for that matter.

Although the ranking does shift year to year - Cost of Living 4th Quarter 2009 this website shows texas ranked 9th, Oklahoma is first, California is 49 and Hawaii is dead last.

Don't forget Texas has a Homeowners Property Tax exemption of 20%, which helps out. Also nicer subdivisions also have higher property taxes, My current tax rate is 2.9%, and my parents live in an unincorporated area with a 2.5% rate, and neither of us have an HOA to pay. My home's tax evaluation is 154K, but the house has a market value of ~175K or so.

RCH99 · 03-03-2010, 08:50 AM

These perceived "high" property taxes are also fully deductable on your federal income tax return, thus reducing your "overall" annual tax liability.

chris_ut · 03-03-2010, 09:01 AM

I pay about $750/month in property tax on a house in that range. Everyone will trot out the homestead exemption but when I got mine it dropped my tax a whole $10/month so don't count on that too much.

NCtoTexas · 03-03-2010, 02:22 PM

Wow. Well, that's just ... surprising. Yes, states have to raise money somehow, but property taxes 6x or 7x higher than other states seems a tad excessive. I will still be thrilled to get the state income tax off my back, but frankly -- net to net, tax-wise, it doesn't seem like it's really going to be any less. What I don't have to pay in state income tax, I will now have to pay in property taxes.

Cost of houses is still a lot less, so it still makes sense, but ... man, this is sticker shock.

Homestead exemption -- isn't that supposed to be 20%? Why did it only drop your taxes $10?

Quote:

These perceived "high" property taxes are also fully deductable on your federal income tax return

Deductability is a given, property taxes are deductible in every state. But yeah, they're not just perceived high, they're high. Sky high, as compared to the other states I've lived in.

Certainly makes a good argument for buying the smallest house you can fit into; I mean, even if you paid off the mortgage, you'd still have a monthly tax bill that's almost as high as a mortgage payment.

Thanks for all the responses. Anyone else care to verify whether the homestead exemption makes much of a difference or not? That reported 20% would amount to around $200/month savings, so it's not quite pocket change...

Oh well. At least I know now. Thanks for all the info.

Houston321 · 03-03-2010, 02:30 PM

Actually, this is a much better way to raise taxes. You can control what you buy, you don't have to have a 300K home. I'd much rather have the choice in what I purchase as opposed to a state income tax which penalizes me for making more money.

baggiegenes · 03-03-2010, 03:04 PM

Homestead exemption:

Your property taxes aren't just one tax. There is a school distrcit tax, and a water and drainage tax, and county services tax, etc. (Each area has a different set, but they each have several). When you file a homestead, each one of these taxing entities gives you something different. The school district may give you 20% off your apraised value just for that tax, the county may just reduce your apraised value a flat $15k. You'll have to call the county apraisal district for each county you are looking to buy a house in to find out the homestead specifics. In some areas the homestead is worth more than others, but as a general rule, the school taxes are usually the largest component of your property taxes. So look for a school district that gives you a percentage off your taxes as opposed to flat amount. I live in Katy and just get a flat $15k off my house whether I own an $85k house or a $500k house. There are other school districts that offer a better homestead exemption than I am getting.

Also, most apraisal districts have websites where you can look up properties and find the assessed value. Do this for all homes you are considering. What you pay for you house does not necessarily reflect what it is appraised at. My neighbor and I have very similar house and paid close to the same ammount, but i protest my taxes every year and my house is appraised at $165k, his is $202k. If someone were to buy my house they would getter a better deal on the taxes over buying his. So look for homes with relatively low appraised value compared to their neighbors.

*additional note, appraised values are in no way based on reality, so they are not usually valid grounds for negotiating a selling price reduction. It is a good thing to be appraised much less than the market price of homes in the area.

derekv · 03-03-2010, 03:23 PM

I just looked up the income tax rate in NC, for most it is 7.75%, so pick your poison.
I'm with Houston321, my annual property tax bill is a tad over 7 grand, less than a third of what my wife's and my income tax would be in NC. For dual income families the TX system is very beneficial.