Houston Property Taxes

Last week, several co-workers and I sat around the gnarled wood table at Mom’s Country Diner (I love me some Southern cookin’). Seeking to talk about anything but work, we talked about our lives…which led to the group apartment dweller piping up about wanting to buy a house. Another person brought up the issue of property tax and then the race was off. Like dogs yipping at the proverbial heels, anyone and everyone offered their opinion on property taxes, which seemed to be something that was genetically wired into them. I thought this might be a good time to introduce the topic of property taxes to you, dear Houston homebuyers.

Property Tax

(feel free to skip this section if you’re familiar with the general idea of property taxes)

Here is the issue. If you’ve never owned a home before then you need to get used to the idea of property taxes. Unlike income tax, or sales tax, which are triggered when you actually do something (making money or buying something), property tax is collected every year by a local government just because you own something. In this case, a house, land, or a condo. If that seems unfair to you, then you are not alone. But what are you going to do? (Apartment owners pay it too, and the cost is just built into the rent, so there’s really no way of escaping it).

So what do these property taxes go toward? Various things depending on the jurisdiction – schools, infrastructure, essential services, etc. However, most of it (and usually all of it) is administered at the local level. Here in Houston we get at least three (3!?) separate tax bills a year – one for water, one for the school district, and one for the city.

Property Tax in Houston


This is where you may be in for a shocker if moving in from another state. The property taxes here are high. I’m talking “you better be sitting down right now and have some Xanax close by” kind of high. But why on earth is it like that? Here are a few different reasons I can think of:

No income tax

There is no city or state income tax in Houston. In New York City, you pay 3-4 percent of you income in city tax plus 4-9 percent in state tax. In almost all other states, income taxes make up a huge portion of their revenue, so Texas has to make it up in some other way. One way to think of it is that you are taxed more just for living (and even more if you want to live in a super luxurious home), but you are taxed less for making money. So get out and make some money!

Low home prices

I believe that local governments feel justified in a certain way in taxing a higher percentage of home value here, because there is simply less home value to be taxed. The same $150K home here (Home A) in Houston might cost $300K or more (Home B) if located in other major cities. If Home A is taxed at 3 percent and Home B is taxed at 1.5 percent, then you are shelling out $4500 a year regardless.


MUD tax

This is a concept that is unique to Texas. When you buy a new house most anywhere else, you are paying for the builder to place plumbing and other infrastructure under your house and connect it to local water and sewer services. Not so in Texas. Instead, a MUD (Municipal Utility District) is established and takes out a gajillion bonds in order to finance all of this infrastructure. These bonds are then paid off over time by the MUD, who sends you a tax bill every year to cover this charge. This makes homes cheaper up front compared to other areas, but creates an additional cost for everyone who plans to use the home until the bonds are paid off. (Note: everything within the City of Houston boundaries is not covered by a MUD. They pay tax directly to the city. )


Fear Not

Are you calmed down yet? Ok. Take a breath and relax. Even with the high property taxes, Texas consistently ranks among the states with the lowest tax burdens. And Houston is a great place to live. In fact, it’s the coolest. Everyone from out of state that I talked to is very pleasantly surprised with how much home you can get for your money here. But it’s very important that you know about your taxes before you buy, or else you may get a surprise in the mail that’s not so pleasant.


There you have it, Houston property taxes in a nutshell. Feel free to chime in below!

April 9, 2013Permalink

Terrific Traffic Friday

Houston Traffic can be a beast!

Check out my Friday commute. Even though I left in the heart of rush hour, I made my drive in the same amount of time as if I had left on a Sunday:

7AM Hwy 59 (I 69) SB HOV from Bltwy 8 to Downtown

7:20AM I-45 SB to Nasa Parkway

8AM In Clear Lake

<passed 1 metro bus stalled in I-45 NB, leading to a back up 10+miles lone>

5PM Hwy 225 to 610 Loop*

5:30PM Hwy59 (I 69) NB HOV to Bltwy 8

6PM Home

<passed a stalled car, and 2 accidents going the opposite direction -phew>

*This is an awesome trick most people in the Southeast Houston don’t know about. Take Red Bluff or Bltway 8 East to 225, take 225 to 610 N. I told my friend about this who commuted from Clear Lake to Jersy Village, he couldn’t believe the route saved him ~30+ minutes!

Not to mention I had a beautiful sunset the whole morning I was on the road!

Coming down I-45, view of Houston NB traffic



February 4, 2013Permalink

MLK Day 2013

We had some friends in from DC on Monday. Here was our itinerary:

11:00AM MLK parade: The website is super impressive, the parade – not so much. I think our favorite “float” was the church vs. Farmer’s Insurance Group (flyer below) touting the slogan, “if they cheated the church, they’ll cheat you too!” Don’t get me wrong, it was a true Southern Parade and a fun way to commemorate the King, but if you go next year don’t expect any floating balloons, or even actual parade floats for that matter.Farmer's Insurance Group vs. The Church

2:00PM David Adickes Studio: hidden from the bustle of downtown is the awesome studio of David Adickes the mastermind behind the Sam Houston Sculpture on N I-45 just outside Conroe. Visiting his studio is a fun free cultural experience, especially if you like history (the Presidents).David Adickes

6:30PM Dinner at the Original Ninfa’s: Having grown up going to chain locations, I was excited to take our friends to the original homestead for some authentic Tex-Mex. With those kinds of high expectations, I was a little disappointed. What we found was a fun urban Mexican restaurant, but nothing out of the ordinary. The ambiance did not disappoint, the food was decent, but the service took forever! Not sure I would drive across town just to eat there again.Ninfa's Restaurant

9:00PM Dessert at Amy’s ice creams. Sitting right next to Montrose, Amy’s ice creams fits right in and is sure to satisfy. I have to agree with the ice cream scooper, when she described their treats as “kind of like Marble Slab, but a whole lot better!” I know BlueBell will always be the Texas favorite, but this Austin based franchise is worth every penny – even the gas to get there.Amy's ice creams from Austin, TX

January 25, 2013Permalink

We did it!

As mentioned in my About Me page, our goal was to buy our second Houston home by the end of 2012. Well, we did it!!

Due to the insanity that is moving during the holidays, I’ve taken a blogging break to regroup. But, now I’m back and more motivated than ever. So be sure to keep checking back as I recount details, share lessons learned, impart new information, and continue to blog about Houston. What an awesome city!!

January 24, 2013Permalink

Move Over Obama! If You’re for Education, Then You’re For More Taxes! Houston Education Bonds Pass.

One of the largest claims in the 2012 elections by Houstonians who bleed pure red was that electing Obama would lead to more taxes, which would in turn lead to Armageddon.  Well, in case you missed it, on election day, Houston voters said YES to 2 bonds supporting the education system which will bring upon themselves HUGE tax increases in the next four years. How HUGE you may ask? Well in the next 4 years, the average home-owner (house costing ~$200K) can expect to pay more than $70/year as a result. The Houston Independent School District (HISD) bond both touts big changes and makes history as the largest bond passed for any Texas School District in the last 25 years! To read more about how the $1.9 billion will be spent, click here.

In addition to the HISD bond, Houstonians also voted YES to a $425 million bond supported by Houston Community College (HCC). A large portion of which will be allocated to Coleman College for Health Science.

The two bonds combined will led to a 7-cent tax increase for HISD zoned residents.

November 15, 2012Permalink

Houston Housing Market – Jobs are coming!

Adding on to an previous post on the Housing Market in Clear Lake. I wanted to give some additional updates on jobs moving to the area.

Plant Expansions

1. Chevron Phillips Baytown Plant and Polyethylene plant (in Old Ocean on U.S. Hwy 25) bringing 10,000 construction and 414 permanent by 2017

2. Dow Chemical Freeport Plant – 4,800 construction jobs by 2017

3. LyondellBasell Channelview plant -70 new R&D jobs by 2013

4. LyondellBasell La Porte plant – bringing jobs by 2014

5. INEOS Chocolate Bayou Plant – bringing jobs by 2013

6. Celanese Corp. Clear Lake Plant – bringing jobs by 2015

7. Exxon Mobil Baytown plant - 10,000 construction jobs, and 350 permanent jobs by 2016

In Addition:

Universal Weather plans to move their headquarters and 700 jobs to Clear Lake

Want to learn more? Read all about it in the Houston Business Journal.


November 12, 2012Permalink

The glass is half empty. No, half full!

So, I’ve come to realize you can never have it all. My aunt just moved into what I am sure is a half to a full million dollar high-rise apartment, and the first thing she did was renovate the whole thing from top to bottom. The value of her renovations will never fully reflect in the value increase of her apartment, but the work she did is worth every penny to her.  Despite the months of headaches, price matching, saving up, etc… there are still quirks about the place that she simply hates.

No place is ever going to be perfect. The minute you fix the squeaky door, it doesn’t fit in its door frame anymore. When you value a house, you really have to look at the functionality of it – the way you will live in it. Then, you look at your wallet and price the changes you want to make to it – cosmetic or function-based. If you plan on the renovations before functionality, then you may not truly be happy for years.

I love the house I live in now for so many reasons that I know house hunters looking at it probably don’t see. The fruit trees in the front and back, for instance. The flow of everything so close together which rocks for a small family. Our den that serves as a sanctuary from the world. We got so incredibly lucky. Before buying this house, we had only looked at a couple of houses in the area on “just for fun” house hunts. We didn’t do a lot of research or pricing of the market.  We were extremely young and uninformed on the home buying process. The day our house went on the market, our realtor suggested we look at it. A few weeks later, after experiencing our first contract war (with another offer that also came in on day 1) we were moving in! At times we wondered if we paid too much or if we moved too fast. But, we have never once regretted the decision or should I say the investment we made. The previous owner renovated every room, so it was move-in ready and up-to-date in ways many homes in this area at this age can not compare. I can’t tell you how wonderful it has been…in the end it’s been the perfect thing for us.

I never thought we would be moving this soon and I will miss our current house and location tremendously. Being on the other end of the deal, having priced the market to death and knowing way more than I did at the beginning, I want to shout out every time someone comes to look at our home how wonderful of a deal they are looking at. But, they may see the cup half empty – and that’s simply too bad for them.

November 9, 2012Permalink

Miller Outdoor Theater – Pinocchio

Miller Outdoor Theater Events CalendarYesterday my friend and I took our kids to the Miller Outdoor Theater in the heart of the Museum district and enjoyed a free production of Pinocchio. The large theater and the open seating on the grass hill behind the theater were both packed with kids (either with their parents or on school field trips). The production surprisingly held the attention of kids of all ages (2-18) and was definitely worth the drive. Miller Outdoor theater is a great way to expose your child to the artsy side of Houston without having to 1. pay a lot of money and 2. worry that your child’s outbursts will bother the other paying customers (because it’s free for all!). To top it off, Hermann Park has plenty of free (up to 3 hour) parking lots. I challenge you to find a better “inner-city” attraction that is all-around cheaper and family friendly! I can’t think of one!

November 1, 2012Permalink

First Impressions – To Trust or Not to Trust

The House Hunting experience is different for every home buyer. Some scour the area they plan to move to for months or years before signing the final contract, while others buy the first home they see. Some home  buyers could care less about the home itself, there are no notable emotions involved in the process, instead each house is evaluated by comps, stats, and location. However, for others it is all about the home’s karma. Like the scene from “We Bought a Zoo“, they simply “know” when they walk in the door that the home is for them.

No matter which way you house hunt, first impressions can make or break your success. Here are some cross-the-board tips regarding first impressions that will help:

1. Pictures can be deceiving. Skillful angles, lighting and lenses can make any house look good. The tip here is don’t buy a house off an online impression – spend time inspecting and exploring it. Also, don’t sell a house short simply because the realtor sucks at taking pictures. What you should do is house hunt by area and see as many houses in that area as you can at a time – this is where first impressions will save you time.  Trust that feeling. if you don’t want to even go inside – then don’t waste your time.

2. Get a second opinion. I really wanted to name this tip “Don’t buy on emotion,” but, the fact of the matter is half or more of home buyers do this and there is nothing wrong with buying a house because you simply “feel” good about. But, this becomes a problem when you let that first impression pull you into a bidding war, or when it entices you to buy above market value. The bottom line here is – Never let your emotion overrun reason.

3. Broaden your perspective. Some people have major tunnel vision when it comes to house hunting. They let their impressions drive their every move. This can lead to disaster if you don’t take enough time to research areas, schools, amenities, flood planes, etc… Don’t get hung up on what is on the surface. Digging deep can make all the difference in your house hunt. This is where my ebook, online forums like the one on city-data, and working with an experienced realtor will help tremendously to ensure your happiness years after you buy.

October 30, 2012Permalink

Monika’s Experience with Clear Lake and KB Homes

I asked my friend to share some of her thoughts on her move to Houston. Below is her opinion:
We loved it in Clear lake! We started out in Texas renting an apartment from 2008-2010 in the Webster area (Highway 3 and El Dorado). The rent price was decent and the neighborhood great with lots of shopping areas and everything I needed near by (i.e. the must haves for a female–Target and Walmart, not to mention the mall and many other yummy places to eat at!) However, as our family grew, the 900 sq. ft. apartment felt a bit tighter each day. Our rent also went up, forcing us to look around for a more suitable place to live. We thought about buying a house but we didn’t know where to begin. Then our friend who is a realtor suggested we looked at KB builders, so we did! The closest KB neighborhood was about 25 minutes away in Houston closer to a city called Pearland so we hopped on the freeway and went to go look. They were building homes from the 90K and we fell in love. Not more than 6 months later, we were in our first home as first time home buyers and couldn’t have been happier! 

At first though, the area the KB was building in was a bit deserted and I was a bit nervous. “Will they have all the stores I love?” I didn’t see much of anything but new houses. However, we soon discovered the area to be very well established, just 5 minutes from Pearland, a fun little city and 10 minutes away from THE downtown Houston, with amazing museums and of course, the best place for kids, the zoo! It was a winner!

We have loved–LOVED our KB home, now in it for the 3rd year. The builders were friendly and professional, the warranties that came with it were all reasonable, not to mention the price for a 2,400sq. ft home. It’s cute, it’s big, it’s in a great neighborhood, surrounded by awesome things to do for people of all ages. 

I’d definitely recommend anyone thinking of moving to Houston/Pearland area to just do it! It’s a great place, if you can stand the heat in the summer! There are great little splash parks everywhere though, so the kids can run around in the summer. Okay, I admit, I run in and out of those kiddy splash zones too! :) Yeehaw!
October 19, 2012Permalink