The state of Texas has long had a reputation for being a business friendly environment due to its low tax policies. Low tax rates are also a way of life in Texas for all of its residents. Texas does not have a state income tax which means that your paycheck in Texas will look different than it would in other states in America. This can be a good thing and could make your paycheck go further, but the money that Texas doesn’t collect in income taxes has to come from somewhere. In other states, income tax money is used to fund local services. Since Texas doesn’t obtain funds via income tax, property taxes are the largest source of funding for local services. This doesn’t necessarily mean that property taxes in Texas are sky-high making home ownership out of reach. It just means that you need to do your research when determining the best location in Texas to own a home.
Although property taxes might seem like a burden to pay for on top of other home owner related expenses, they are crucial to your city’s basic operations and maintenance. In Texas property taxes help fund things like public schools, city streets, county roads and police and fire protection to name a few. The way that property taxes are determined is by the value of your home. Local offices are established to determine your tax rate so depending on where you live in Texas, your tax rates will be different. There are laws in place to protect you to make sure that you and your property are being taxed fairly. All taxation must be equal and uniform and with few exceptions, all property is taxable.
When you are trying to determine how much you can afford for a new home, it’s important to keep tax rates in mind. You can determine the total price of a home on your own even if you are in the early stages of looking for a home. First you need to determine what district your home is in, then you can determine what your local tax rate is. You could find out what the current owners are paying in property taxes to give you a general idea of what you could be spending. If you go this route it’s important to keep in mind that the current owners could be eligible for exemptions that you might not be eligible for. However, it’s also possible that your tax rate will be lower because you qualify for more exemptions.
The good news is that all of that money that you would pay to other states in the form of personal income tax is money that is available for you to use however you want in Texas. For many people, this means that they now have more money available to put towards owning a home. You could afford more for a home in Texas than you could in any other state due to their income tax laws. The most important thing to do in the process of determining your property tax and purchasing a home in Texas is to educate yourself. Make sure you know what an appropriate tax rate is for the area where you are looking to purchase a home. This will help you so that you and your family can comfortably purchase the home of your dreams.
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