7 ms·

> the cost of housing is one-third of Bay Area prices and the absence of a state personal income tax amounts to a 13.3% raise for top earners. This point alway

> the cost of housing is one-third of Bay Area prices and the absence of a state personal income tax amounts to a 13.3% raise for top earners. This point always makes me laugh because anyone who lives in affluent TX neighborhoods knows your property tax is _enormous_ and usually makes up for a majority of state income tax you save. They still need to pay for roads and schools, right?

bluedevil2k 6y ago
Very true - here in Round Rock (outside Austin), it’s about 2.2% of the home value.
- cam0 6y ago
  For quick comparison it's 1.18% in San Francisco. Property tax bill on a $2.7m house in SF is ~$32,400/yr, and the property tax bill on a $1.5m house in Austin would be around ~$33,000/yr.
  - almost_usual 6y ago
    If you’re buying a 2.7m house in SF you’re paying at least 80k in state income tax.
    - cam0 6y ago
      True, and not everyone's goal is to minimize their tax bill.
  - bluedevil2k 6y ago
    There aren’t many $1.5M houses in Austin. In Round Rock (home of Dell), the highest price you’ll find is around $800k for a 5600 square ft house with premium upgrades.
    - jjav 6y ago
      According to zillow there are 300 homes over $1.5M for sale right now in Austin. Surely many more not currently listed for sale. Sorry for the long link.. https://www.zillow.com/homes/for_sale/?searchQueryState=%7B%22pagination%22%3A%7B%7D%2C%22usersSearchTerm%22%3A%22Austin%2C%20TX%22%2C%22mapBounds%22%3A%7B%22west%22%3A-98.19083434960937%2C%22east%22%3A-97.3956988515625%2C%22south%22%3A30.069570870364913%2C%22north%22%3A30.505958688057213%7D%2C%22isMapVisible%22%3Atrue%2C%22filterState%22%3A%7B%22sort%22%3A%7B%22value%22%3A%22globalrelevanceex%22%7D%2C%22price%22%3A%7B%22min%22%3A1500000%7D%2C%22mp%22%3A%7B%22min%22%3A4917%7D%7D%2C%22isListVisible%22%3Atrue%2C%22mapZoom%22%3A11%7D https://www.zillow.com/homes/for_sale/?searchQueryState=%7B%...
      - bluedevil2k 6y ago
        Most of those are well over $2M. 1.5M is a tough price point here, because the ones by the water (most of the ones in your link) are really expensive while just a few blocks away the price drops quickly.
function_seven 6y ago
The property tax being double is still cheaper when the housing costs are 1/3 though, right? I guess if you Prop 13'd your way into a low assessment, then the math doesn't quite work that way, but for someone who bought a Bay Area house recently, then moved to Texas, the net difference is still a tax reduction.
- abernard1 6y ago
  A major tax reduction. Austin property taxes are 1.8%. SF property taxes are 0.65%. For it to breakeven, just on property tax, Austin property taxes on a house 1/3 the cost of an SF house would have to be 3*0.65 or 1.95%. So people in Austin effectively pay less or the same on property tax than people in San Francisco. I might add, house prices in Austin/Dallas/Houston are often less than 1/3rd the price of houses in the Bay Area for comparable quality. In Austin, median housing price is $365K, and the average sq footage of a house in Austin is about 70% larger than one in SF.
  - bradlys 6y ago
    Source on sf property taxes being 0.6%? Most places I see in Bay Area are 1.1-1.6%.
    - abernard1 6y ago
      I took the lowest number I could find. Double how bad it is for the Bay Area then relative to Austin. Property taxes in Austin (not to mention how cheap Houston, Dallas are) are not even as expensive as the Bay Area. That's not even considering income taxes or no capital gains.
  - kbar13 6y ago
    sf property tax is 1.2
    - abernard1 6y ago
      Thank you! That would make property taxes in Austin need to be 3 * 1.2 or 3.6, which is double what they actually are. So people in SF pay basically double property tax of people in Austin for their houses, excluding the fact that houses in Austin are much larger.
njarboe 6y ago
Which is great. A high property tax keeps the price of housing down (what people will pay for a house is cost per month, basically mortgage plus property tax), makes people want to have new housing built so that housing prices don't go up, and promotes a general attitude of anti-NIMBYism. Just the opposite of California with its low property tax and very aristocratic prop 13 problem.
- fokinsean 6y ago
  > A high property tax keeps the price of housing down Have you seen Austin prices recently, it's getting pretty hectic in "core" Austin. > promotes a general attitude of anti-NIMBYism This isn't entirely true. In the recent election there was a public transit bill in Austin which would raise prop taxes by 4% I think. Even though it passed there was a hefty amount of opposition to supporting it, and generally anything that deals with raising prop taxes. Also in my local neighborhood (north central austin) there is plenty of nimbyism regarding planned multifamily construction.
  - njarboe 6y ago
    Well, Austin is has been known for decades as the one city in Texas where people with "California" like values can feel at home. They have immigrated en-mass and continue to change the native culture at a rapid rate, I would imagine.
- ylhert 6y ago
  I totally agree and I think property taxes are way more fair and equitable for a society than income taxes. Usually we tax behaviors we want to curb. Income taxes disincentivize people from earning more, whereas property taxes are a consumption tax. In my mind this makes way more sense, and there's good data to suggest property taxes are the best/most efficient way to gain needed revenue for a city but do the least "damage" to economic prosperity
  - giantg2 6y ago
    "I totally agree and I think property taxes are way more fair and equitable for a society than income taxes." Until you retire and no longer can pay the tax and are kicked out of your home. Logically, it makes more sense to tax people who are actually making money (income and capital gains) since that means they actually have money. Taxing people on a fundamental need (shelter) could potentially increase homelessness, especially if you hit a rough time economically like with the pandemic. "Income taxes disincentivize people from earning more" I don't see how flat or even marginal income taxes disincentivize people from making more money.
deleted 6y ago
[deleted]
abernard1 6y ago
> They still need to pay for roads and schools, right? And we do, with far less taxes. $57.38 billion in revenue for TX at 29M population, $100 billion in revenue for CA at 39.5 million population. It's $1979 per person in TX, and $2531 in CA. Or about 75%.
gopi 6y ago
True, the property tax rates are higher in TX. But since house prices are much less, in absolute terms you pay less property tax than CA. Combine this with 0% income tax, your tax load is a lot less in TX than CA.

bluedevil2k 6y ago

Very true - here in Round Rock (outside Austin), it’s about 2.2% of the home value.

cam0 6y ago
For quick comparison it's 1.18% in San Francisco. Property tax bill on a $2.7m house in SF is ~$32,400/yr, and the property tax bill on a $1.5m house in Austin would be around ~$33,000/yr.
- almost_usual 6y ago
  If you’re buying a 2.7m house in SF you’re paying at least 80k in state income tax.
  - cam0 6y ago
    True, and not everyone's goal is to minimize their tax bill.
- bluedevil2k 6y ago
  There aren’t many $1.5M houses in Austin. In Round Rock (home of Dell), the highest price you’ll find is around $800k for a 5600 square ft house with premium upgrades.
  - jjav 6y ago
    According to zillow there are 300 homes over $1.5M for sale right now in Austin. Surely many more not currently listed for sale. Sorry for the long link.. https://www.zillow.com/homes/for_sale/?searchQueryState=%7B%22pagination%22%3A%7B%7D%2C%22usersSearchTerm%22%3A%22Austin%2C%20TX%22%2C%22mapBounds%22%3A%7B%22west%22%3A-98.19083434960937%2C%22east%22%3A-97.3956988515625%2C%22south%22%3A30.069570870364913%2C%22north%22%3A30.505958688057213%7D%2C%22isMapVisible%22%3Atrue%2C%22filterState%22%3A%7B%22sort%22%3A%7B%22value%22%3A%22globalrelevanceex%22%7D%2C%22price%22%3A%7B%22min%22%3A1500000%7D%2C%22mp%22%3A%7B%22min%22%3A4917%7D%7D%2C%22isListVisible%22%3Atrue%2C%22mapZoom%22%3A11%7D https://www.zillow.com/homes/for_sale/?searchQueryState=%7B%...
    - bluedevil2k 6y ago
      Most of those are well over $2M. 1.5M is a tough price point here, because the ones by the water (most of the ones in your link) are really expensive while just a few blocks away the price drops quickly.

function_seven 6y ago

The property tax being double is still cheaper when the housing costs are 1/3 though, right? I guess if you Prop 13'd your way into a low assessment, then the math doesn't quite work that way, but for someone who bought a Bay Area house recently, then moved to Texas, the net difference is still a tax reduction.

abernard1 6y ago
A major tax reduction. Austin property taxes are 1.8%. SF property taxes are 0.65%. For it to breakeven, just on property tax, Austin property taxes on a house 1/3 the cost of an SF house would have to be 3*0.65 or 1.95%. So people in Austin effectively pay less or the same on property tax than people in San Francisco. I might add, house prices in Austin/Dallas/Houston are often less than 1/3rd the price of houses in the Bay Area for comparable quality. In Austin, median housing price is $365K, and the average sq footage of a house in Austin is about 70% larger than one in SF.
- bradlys 6y ago
  Source on sf property taxes being 0.6%? Most places I see in Bay Area are 1.1-1.6%.
  - abernard1 6y ago
    I took the lowest number I could find. Double how bad it is for the Bay Area then relative to Austin. Property taxes in Austin (not to mention how cheap Houston, Dallas are) are not even as expensive as the Bay Area. That's not even considering income taxes or no capital gains.
- kbar13 6y ago
  sf property tax is 1.2
  - abernard1 6y ago
    Thank you! That would make property taxes in Austin need to be 3 * 1.2 or 3.6, which is double what they actually are. So people in SF pay basically double property tax of people in Austin for their houses, excluding the fact that houses in Austin are much larger.

njarboe 6y ago

Which is great. A high property tax keeps the price of housing down (what people will pay for a house is cost per month, basically mortgage plus property tax), makes people want to have new housing built so that housing prices don't go up, and promotes a general attitude of anti-NIMBYism. Just the opposite of California with its low property tax and very aristocratic prop 13 problem.

fokinsean 6y ago
> A high property tax keeps the price of housing down Have you seen Austin prices recently, it's getting pretty hectic in "core" Austin. > promotes a general attitude of anti-NIMBYism This isn't entirely true. In the recent election there was a public transit bill in Austin which would raise prop taxes by 4% I think. Even though it passed there was a hefty amount of opposition to supporting it, and generally anything that deals with raising prop taxes. Also in my local neighborhood (north central austin) there is plenty of nimbyism regarding planned multifamily construction.
- njarboe 6y ago
  Well, Austin is has been known for decades as the one city in Texas where people with "California" like values can feel at home. They have immigrated en-mass and continue to change the native culture at a rapid rate, I would imagine.
ylhert 6y ago
I totally agree and I think property taxes are way more fair and equitable for a society than income taxes. Usually we tax behaviors we want to curb. Income taxes disincentivize people from earning more, whereas property taxes are a consumption tax. In my mind this makes way more sense, and there's good data to suggest property taxes are the best/most efficient way to gain needed revenue for a city but do the least "damage" to economic prosperity
- giantg2 6y ago
  "I totally agree and I think property taxes are way more fair and equitable for a society than income taxes." Until you retire and no longer can pay the tax and are kicked out of your home. Logically, it makes more sense to tax people who are actually making money (income and capital gains) since that means they actually have money. Taxing people on a fundamental need (shelter) could potentially increase homelessness, especially if you hit a rough time economically like with the pandemic. "Income taxes disincentivize people from earning more" I don't see how flat or even marginal income taxes disincentivize people from making more money.

deleted 6y ago

[deleted]

abernard1 6y ago

> They still need to pay for roads and schools, right? And we do, with far less taxes. $57.38 billion in revenue for TX at 29M population, $100 billion in revenue for CA at 39.5 million population. It's $1979 per person in TX, and $2531 in CA. Or about 75%.

gopi 6y ago

True, the property tax rates are higher in TX. But since house prices are much less, in absolute terms you pay less property tax than CA. Combine this with 0% income tax, your tax load is a lot less in TX than CA.