This is the time of year that lots of people in Texas (and especially our NEW Texans) get really upset about property taxes. And, let’s be real, they are very high here in The Lone Star State. CoreLogic recently ranked the median property tax rates of every state, and the great state of Texas was the 5th highest with a median rate of 2.17%, behind only Illinois, New York, New Hampshire, & New Jersey (in that order). Ouch! That stings! But let’s get a little perspective –
- Texas is 1 of only 7 states that does NOT have a state income tax. (source)
- Texas is 1 of only 13 states that does NOT have a real estate transfer tax of any kind, and, in fact, Proposition 1 (passed in 2015) constitutionally prohibits there from ever being a transfer tax in Texas. In states with a transfer tax, these taxes can be assessed by the state, county, AND city. They range from 0.01% – 4% (source 1 & source 2)
- Texas has one of the broadest homestead protections of all the states, which helps protect residents from the forced sale of their primary residence to satisfy creditors and also helps to reduce property taxes. (source)
- Texas does NOT tax the proceeds from the sale of a property by a non-Texas resident. States like New Jersey, California, Maryland, & 12 others penalize any non-resident selling real estate in their state by assessing a tax based on the sales price (not the net proceeds or profit) of anywhere from 2%-8.82%. (source)
So, yes, our property taxes are high and our assessed values are continuing to rise, but we have to fund our schools and local governments that provide critical services and infrastructure SOME how. And, our overall cost of living is still incredibly reasonable compared to a lot of states. If our economic climate wasn’t as favorable as it was, most NEW Texans wouldn’t be here anyway, right? So, welcome to Texas! We hope you’ll come to love and understand this great country … I mean, state … the same way us native Texans do.