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Houston Property Taxes


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I've been doing some research recently, that I thought you guys would find interesting. I was chatting with my brother-in-law who lives in Seattle, and he and I were comparing notes on shopping for a home. He was lamenting how expensive things were, and we both were complaining about taxes. Then we got into details, and I realized that his taxes were so much lower than ours that he and I would be making similar monthly payments on two very different prices of homes! And Washington DOES NOT have an income tax! I thought they did, but they don't!

I then decided to dig into the issue and compare property taxes in the US 4 biggest cities, and post what I found on my blog. You can read the whole write up here: http://www.neohouston.com/2009/06/property...nd-home-prices/

Here's the biggest surprise:

Homeowners in Los Angeles, on a median home price of $390k actually pay LESS property tax than homeowners in Houston with a median home price of $190k. Of course, California is all kinds of screwed up, but I was very surprised to find out how much less tax the city collects as compared to Houston. I wonder where they make up the difference?

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In California, there's that nasty state income tax with rates of 9% or higher that kick in at a relatively low level. There's also property tax imposed on cars, boats, RV's, etc. When we moved back to Houston from California, our property taxes went from $1800 to $3,600 while our state income taxes went from $6,000 to $0. That's a significant savings overall. Overall housing costs are still affordable in Houston.

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Interesting statement found in the blog...

As locals, we should probably be familiar with the Houston tax system.

And yet, your figures reveal that you actually know very little about the Houston tax system. Your nominal tax rates completely ignore the homestead exemption offered by most taxing districts, ranging from 10% to as high as 20% + $25,000. Using the homestead exemptions that are free for the asking, a Houstonian with a $100,000 house would pay $1,739.04 in annual property taxes. That would be an "effective tax rate" of 1.74% per $100, NOT the 2.5% that you claim.

Further, as noted earlier, you completely ignored that all 3 of the other jurisdictions have income taxes. Perhaps the most misleading statistic of all is ignoring what $100,000 buys you. Differing property values in the 4 cities means that $100,000 may get you a 3 bedroom house in a middle class suburb in Houston, but it won't even get you a garage apartment in the other cities.

Color me unimpressed with your analysis.

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People can be so defensive :)

For what it's worth, I'm not trying to argue anything about whether I like Houston, whether it's a good place to live, or whether you can get a nice house here.

I'm specifically ONLY interested in the way that the tax structure impacts the purchasing power of buyers in Houston, and therefore leads to lower listing prices than we would have with lower taxes.

@RedScare: I added this comment at the end of the post, and it adresses the same point you made.

You
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Here's the biggest surprise:

Homeowners in Los Angeles, on a median home price of $390k actually pay LESS property tax than homeowners in Houston with a median home price of $190k. Of course, California is all kinds of screwed up, but I was very surprised to find out how much less tax the city collects as compared to Houston. I wonder where they make up the difference?

State income taxes of 9.3% in California kick in quickly for anyone with a decent salary. State income taxes in Texas = 0%

This is why it costs $2,000 to rent a UHaul from LA to Houston, but only $300 from Houston to LA. And California is essentially bankrupt, so high taxes and low services.

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