Property Taxes In The Houston Area

Property Taxes In The Houston Area

Relocation buyers have a lot on their minds when moving to the Houston area. One of them includes property taxes. From my perspective, property taxes should be the least concerning. Generally speaking the tax rate for all of Harris County is about 2.8%. The rate is lower in Montgomery, Waller and surrounding counties. Harris County is big. Over 4 million residents live Harris County. It’s by far the biggest county in Texas and the third largest in the United St631px-Map_of_Texas_highlighting_Harris_County_svgates.

Some of the higher tax rates can be found in newer developments in the suburbs. Some neighborhoods like Rock Creek, Bridgeland and Cypress Creek Lake Estate can hover over 4%. Sugarland also has newer developments with higher tax rates.

In Texas we have Homestead Exemption rights which gives homeowners the opportunity to claim Homestead Exemption. You can only claim Homestead on the home you reside in and you can only claim it on one property. The tax break usually equates to a small discount on your property taxes.

When shopping for your next home in the Houston area you shouldn’t pass on a house because the tax rate is 3.7 versus 3.2%. This might sound like an insignificant topic to discuss but I’ve witnessed and heard of buyers who literally walk away from the home of their dreams because they are so focused on the .6 tax rate difference. .6% of 100k is a very small amount to use as a deciding factor to not purchase a home.

There are many other factors that should weigh in more when making a purchase.  The price trends, school districts, lot location, condition of the home, future area development and the company who built your home should all rank higher on your list of importance. Taxes are important, but your search shouldn’t solely revolve around the tax rate.

 

Texas no state-income tax.

Don’t waste your time researching TAX VALUES when it comes to property values. The local county tax assessor never enters homes to determine value. Texas is a non-disclosure state, so what homes sold for are not released to the public like they are in many other states. The tax values can be off by as much as 40%! Like Zillow and a lot of “online home valuation sites” the tax value really is just a guess.

The tax value can be important. If you buy a home for $200,000 but the tax value is $350,000 then you have reason to be concerned. Your tax rate will eventually go up and 3% 150k is significant.

In Harris County you have three taxes (typically) water, property and school. The better the schools, the higher the tax rate. All three taxes are typically incorporated into your mortgage payment so you shouldn’t be worried about paying taxes at the end of the year.

4 Comments
  • D Harvey
    Posted at 16:28h, 29 May Reply

    I completely disagree with your comment that a .6% tax difference should not be considered in buying a home…. A 700k to 1MM home that makes a large difference as taxes only go up in Harris County (home valuations)!! I could pay off my home and still have a mortgage payment due to the tax rates… Houston has some of the highest property tax rates in the country which more than makes up for the lack of an income tax. I live in Towne lake and my taxes on a $960k house is more than my mortage ($34,000 in 2015 over 3.7%) that .6% tax is about $6k per year or $500 per month (enough for a car payment). Not only is the rate a factor but Harris County automatically raises the home value by 10% here in Towne Lake year over year and you have to fight it every year.

    People buying a house should most definitely look at the tax rate and the tax appraisal trend!! I am moving just because if the ridiculous tax rate and appraisal district here in Cypress MUD 501!!

    • Greg
      Posted at 14:12h, 29 June Reply

      D. Harvey,

      I should have prefaced this post to “most people.” You’re one percent of one percent and most of us don’t live in a million dollar home. You knew when you bought that home that the taxes for your property were going to be as you say, “ridiculous.” They are equally as ridiculous in Bridgeland, Blackhorse and Cypress Creek Lake Estates. That’s what happens when you buy”new” in a higher-end community with lakes and loads of neighborhood amenities. Your tax rate is incredibly high, and you’re right, it’s going to go up. Most people south (if not all) of 290 and north of I-10 could relate to this post as their home value ranges from $130,000 to maybe $400,000 with an average tax rate of about 2.8%. It’s apples to apples, and your house is the orange. Best of luck getting your home sold.

  • Colin
    Posted at 15:06h, 28 December Reply

    Was thinking about moving from SterlingRidge in the Woodlands to Bridgeland to get close to my granddaughter, but 2.42% to 3.7% is ridiculous, $8000 more on a $600k house, so YES it matters.

  • J B
    Posted at 14:37h, 31 December Reply

    I agree with D Harvey. For nine years I’ve lived in Cinco SW, we had our house built in the first subdivision. Over the years our HOA went up a couple of hundred dollars to now $1100.00/year. Our area is now on treated water and our MUD taxes are $3,000.00/year. Katy ISD is extremely expensive and those bonds keep being passed. A big part of that is the many apartment complexes going up on 1093 and now new developments going up along SH 99. Their votes do count and while I haven’t counted apartments vs homes, you bet those apartments want the most out of their school district. It’s the reason so many move this way.

    Now back in 2002 when I moved into the Houston area, I was told Fort Bend taxes were lower than Harris. As Katy has both Harris and Fort Bend Counties in it, I decided to go with Fort Bend. That is no longer true. Fort Bend evaluations keep jumping up, my house which was built for $249,000.00 is worth $350,000.00. Along with that jump is our homeowners insurance tripling. Fort Bend has had too many natural disasters with flooding, hail, and Hurricane Ike. Our Farmers agent has told us Farmers is getting out of Fort Bend and more recently won’t insure in Harris, either.

    As my husband is taking early retirement before age 66, all these factors are a big deal. We could relocate within Fort Bend and save $5,000.00/year by not having a HOA or MUD. A smaller home will save on utilities. Moving outside Harris and Fort Bend will save a few thousand more. in homeowners insurance. Actually, it’d be nice to see an article here on where to retire in the Houston area because these ‘over 55’ places are just as expensive as anywhere else. And we all know researching for flooding is the most important part of searching for a new home.

    We had hoped to retired in this home but with the rising costs of MUD, HOA, taxes, and property insurance, those three are $13,000/year. Even with the homestead exemption that doesn’t dig into the problem. With Fulshear booming and this urban sprawl heading west, I can see the same thing happening along SH 99 that now connects to Tomball and beyond.

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