Property Taxes in Northwest Houston
When people move to the Houston area from other states they are often surprised by our high property taxes. We were in that group when we moved here back in 1996. We about flipped when we saw what we were going to be paying in property taxes as it was about three times what we were paying in another state. What we came to realize however is that because Texas does not have state income tax it is almost a wash. Texas is one of seven states without an individual or corporate income tax. Most states derive about 40% of their revenue from income taxes, a third from sales tax and the rest from taxes on items such as business licenses and gasoline. Since Texas doesn’t have a state income tax they have a fairly high sales tax (in our area 7 to 8%) and high property taxes but that is offset by no state income tax. All that infrastructure has to be paid for in some way; I guess.
Taxes in Northwest Harris and Southeast Montgomery County
In Northwest Harris and Southeast Montgomery Counties there are basically three different property taxing authorities. There is a county tax; which covers such things as county, hospital, emergency services, port authority, flood control, community college etc. The second tax is a school tax. The amount of this tax will depend on which school district you live in. The amount of the school district taxes vary by district but they are very similar; they differ by pennies. It doesn’t matter where you live you are going to have these two taxing authorities.
The third taxing authority is the MUD or Municipal Utility District. Basically this is your water & sewer tax. This is the taxing authority that is going to vary subdivision by subdivision. There are a few older subdivisions in the area that have paid their bonds and don’t have this tax. The rate will vary from .25 to over $2.00 per 100 value of your house. If you live in a country subdivision and are on a septic you will not have this tax. Typically the country subdivisions are on septic and have community water.
If your home is your homestead you can qualify for a homestead exemption. This can be up to 20% of your property tax. Each taxing entity will give you a different exemption though so you will need to check with the taxing authorities in the area you live. To get information for Harris County taxes you can go to the Harris County Appraisal District HCAD. For Montgomery County taxes you can get information at the Montgomery County Appraisal Tax Office.
For additonal information about homestead exemptions please watch the short video below.
Even with the higher property tax Texas ranks fairly low in overall taxes paid among all 50 states. I found a study where The Tax Foundation, a nonprofit fiscal policy research group, estimated the average taxpayer’s total state and local tax burden for 2008 in each of the 50 states and the District of Columbia. According to that study Texas was ranked 7 out of the nation but there are differing studies. Texas always seems to be ranked fairly good though.
The good news is that you get a LOT of home for your money in Texas; even with the high taxes. We have lived in two other states and for a similar payment we bought a newer home with more square footage. What a great place to live!
The video below gives additional information about property taxes.
