Texas Is The Seventh-Priciest State In The Nation For Property Taxes
Home price affordability is a major selling point commercial real estate brokers use when advertising North Texas as the right launching pad for growing companies.
But a new study from WalletHub shows the expense of owning a home in Texas and DFW may have reached a boiling point where other U.S. states are far more competitive on pricing.
Texas has an effective tax rate of 1.81%, WalletHub reported. At this rate, someone with a $205K home in Texas pays $3,703 annually in property taxes. The median Texas home price hovers around $161,700, which costs residents about $2,900 in tax payments annually, WalletHub said.
In more popular parts of Texas, like North Texas, the tax burden of residents is even higher as the area's growing population pushes home values up.
The median home price in the Dallas-Fort Worth-Arlington Metro area is around $253K, according to data from Zillow. At this price point, a homeowner pays about $4,500 a year in taxes, based on WalletHub's effective tax rate for Texas.
Other states like Arizona, Virginia and North Carolina fare much better when looking at their total housing costs annually as compared to Texas.
Arizona maintains a 0.69% effective tax rate and boasts a median home price value of $209,600, according to WalletHub.
Meanwhile, an Arizona homeowner with a $205K property pays $1,408 in annual taxes, compared to $3,703 in Texas for a similarly priced home.
On a $253K home, Arizona residents would pay $1,745 annually in taxes at the 0.69% tax rate, compared to $4,500 in Texas.
Virginia, which bested Texas last year by securing Amazon's second headquarters during a national search, carries a lower effective tax rate of 0.81%, WalletHub reported.
Even though Virginia's statewide median home price sits much higher at $264,900, residents pay $2,155 in taxes on this type of property. Meanwhile, North Texans paying for a similarly priced home dish out nearly $4,800 each year.
North Carolina also offers a much lower effective property tax rate of 0.85% and a median home value of $165,900, according to WalletHub. For a median-priced home, North Carolina residents pay $1,410 in annual taxes, compared to the nearly $3K tab Texans pick up for median-priced homes.
The states with property tax burdens worse than Texas are Vermont (with its 1.88% effective tax rate), Wisconsin (1.91%), Connecticut (2.11%), New Hampshire (2.2%), Illinois (2.3%) and New Jersey (2.47%).