Thursday, May 29, 2008

Austin vs Boise Taxes


When we were looking at houses in Austin last year, we liked the much lower prices of the houses - ~$100/sqft for Austin vs ~$142/sqft for Boise. What shocked us though was that the Austin property taxes were much higher at 2-3% of appraised value versus Boise property taxes of 1.205 (2006 rate).

However, we needed to consider that Texas has no state income tax. So we were curious how the higher Austin property taxes would compare to the lower Boise property taxes PLUS Idaho state income tax of 1%-7.8%.

Here's a comparison:
Boise Property Taxes and State Income Tax
a. Assumed House Appraised Value = 300000 (300000 - 89000 (2007 exemption)) * 1.205%
Property Taxes = 2500
Assumed Income = 100000
State Income Tax = 7800
TOTAL Taxes = 10300

b. House Appraised Value = 400000
Property Taxes = 3700
Assumed Income = 100000
State Income Tax = 7800
TOTAL Taxes = 11500

Austin Property Taxes assuming worse case at 3%
a. Assumed House Appraised Value = 300000
Property Taxes = 9000

b. Assumed House Appraised Value = 400000
Property Taxes = 12000

CONCLUSIONS:
- For a 300K house, Austin taxes is lower by about 1000.
- For a 400K house, Austin taxes is higher by about 500.
- The higher the appraised value of the house, the higher the Austin taxes. However, at the 300K-400K house price range, the difference is not significant (but of course, I did not apply any statistics to it!)
- The higher the income, the higher the total Boise taxes. Since the ID state income tax rate is a large multiplier, this would have a significant effect to the total taxes in Boise.

Also, this is not an apple-to-apple comparison because a 300K house in Boise would be about 2100 sqft while it would be a 3000 sqft house in Austin. (I've got to say though that the finishing workmanship of the Boise houses are definitely better than over here.)

All in all, I think we did okay on the Austin house since the total tax did not change significantly and we also have more room! Moreover, there is also a possibility that the Austin property taxes in the Hays county would be decreasing on a yearly basis until it "stabilizes" at the 2% level. I look forward to those days!

Meanwhile, I hope this gives you an idea on what to look out for when considering out-of-state relocation!

1 ADD YOUR COMMENT!:

Bob Foss September 9, 2015 at 5:36 PM  

Several states have no income tax, but the fact still remains Texas property taxes are very high along with a high sales tax. Some states have no income tax yet still assess reasonable property tax rates.

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