PROPERTY TAX REPORT

Texas has the 6th highest real estate property taxes, new report finds

Texas' property tax rate is 1.74 percent, ranking it No. 46 in WalletHub's report.

Courtesy of StepStone Realty

It’s that time of year again where Texas homeowners grimace at their tax bills. But here’s some consolation – did you know the Lone Star State doesn’t have the highest property tax rate in the U.S.? Personal finance website WalletHub’s 2023 report says there are five states paying higher property taxes than Texas.

In the report, Hawaii comes in first place with the lowest property tax rate out of all 50 states and the District of Columbia – 0.29 percent. With a median home value of $662,100, that means the average Hawaiian is paying $1,893 in annual property taxes.

Toward the bottom of the list (meaning states with the highest property tax rates), Texas sits at No. 46. The median home value in Texas is $202,600 with a property tax rate of 1.74 percent, which means the average Texan pays $3,520 in property taxes.

States paying higher property taxes than Texas are Vermont at 1.90 percent, New Hampshire with 2.09 percent, Connecticut at 2.15 percent, and Illinois with a 2.23 percent tax rate. Coming in at No. 51 with the most expensive property tax rate on the list is New Jersey, sitting at 2.47 percent. At that rate, New Jersey homeowners pay $6,057 on a median home valued at $355,700.

Dr. Alex Combs, assistant professor in the Department of Public Administration and Policy at the University of Georgia, says people should consider how much they could pay in property taxes when making the decision to move.

"After all, people are sensitive to price, and the property tax is a visible cost of homeownership that funds generally desirable government services like education and public safety," he explains. "If they have the opportunity, people are going to seek the biggest benefit for their property tax buck."

The 10 states that pay the lowest real estate property taxes are:

No. 1: Hawaii – 0.29 percent
No. 2: Alabama – 0.41 percent
No. 3: Colorado – 0.51 percent
No. 4: Nevada – 0.55 percent
No. 5: South Carolina and Louisiana (Tied) – 0.56 percent
No. 7: District of Columbia – 0.57 percent
No. 8: Utah and Delaware (Tied) – 0.58 percent
No. 10: West Virginia – 0.59 percent

While Texas homeowners will feel the sting of their property taxes, at least they can find some comfort in not having to worry about vehicle property taxes. Texas vehicle owners do have to pay a 6.25 percent tax rate on the purchase price of a car with their local tax assessor-collector, but they do not have to pay annual vehicle property taxes. Plus, it’s not just Texas – WalletHub determined 23 other states and Washington, D.C., also do not have vehicle property tax rates. Louisiana has the lowest rate out of the remaining states who do pay vehicle property taxes, at 0.10 percent. The state with the highest vehicle property tax rate is Virginia, at 3.96 percent.

The full report and its methodology can be found on WalletHub’s website.

Homeowners Property Taxes WalletHub property taxes in texas

bang for your buck

These are the 5 most affordable Austin ZIP codes for renters

Belterra neighborhood in southwest Austin

Belterra Community Association - Facebook

Southwest Austin's 78737 ZIP code, which includes neighborhoods like Belterra, was named the No. 1 most affordable area for renters in the city.

Trying to afford buying a home in Austin is difficult enough with current mortgage rates, and doubly so if you're already paying high rent on an apartment or a house. But there are five Austin ZIP codes where renters can get the most bang for their buck, according to a new study by financial services company CashNetUSA.

To find the most affordable ZIP codes for renters in the U.S., analysts compared median household incomes by ZIP code to the average annual rent costs in those areas using the Zillow Observed Rent Index. ZIP codes where the average annual rental constituted the lowest percentage of median household income were considered the "most affordable."

Austin's 78737 ZIP code stood out as the No. 1 most affordable in the city for renters. This area encompasses several Southwest Austin neighborhoods across Highway 290 West and FM 1826, including Belterra, Highpointe, Goldenwood, Lewis Mountain Ranch, and more.

According to the study's findings, the average monthly cost of a rental in 78737 comes out to $1,870, while the U.S. Census Bureau estimates the ZIP code's median household income is more than $164,000 per year. The study's analysts then calculated that the annual rent of a home in this area only takes up 16.05 percent of a household's median income.

In the No. 2 spot citywide is 78732, which spans wealthy West Austin neighborhoods like Steiner Ranch, Bella Mar, Lakeland Park, Marshall Ford, Comanche Village, and more. CashNetUSA says the average rent cost in this ZIP code is $2,638, but since the median household income is more than $194,000 (more than double the citywide median), this level of affordability might not feel relatable to the average Austinite. Annual rent costs in 78732 take up 17.53 percent of a household's income.

In Northwest Austin's 78750 ZIP code (No. 3), which stretches from Jester Estates all the way to Pecan Park in Lakeline, renters pay an average $1,594 per month for their homes, which amounts for 17.60 percent of the median household income ($123,722 annually) for the area.

The remaining two ZIP codes that CashNetUSA says are the most affordable for Austin-area renters are 78749 (Oak Hill, Circle C, Legend Oaks, Sendera, Village at Western Oaks, Maple Run, and more), and 78717 (Avery Ranch, Davis Spring, and Brushy Creek). Annual rent costs in both ZIPs amount to 18.64 percent of a household's median income, the study found.

In 78749, the average rent costs $1,752 per month, versus $1,865 monthly in 78717. The Census Bureau estimates the ZIP codes' median annual incomes to be about $114,000 and more than $140,000, respectively.

The top ZIP codes for renters in America
CashNetUSA found the No. 1 most affordable ZIP code for renters nationwide is 66224 in Leawood, Kansas, where annual rent only takes a 10.57 percent cut out of a household's median annual income.

Elsewhere in Texas, San Antonio's 78248 ZIP ranked as the No. 4 most affordable ZIP code for renters in the U.S., and the No. 1 most affordable ZIP code statewide.

Two Houston-area ZIP codes – 77401 and 77094 – ranked No. 9 and No. 12 nationally. The North Texas ZIP code 75013 in Allen ranked two spots behind Houston to claim the No. 14 spot nationally.

The full list of the top 15 most affordable ZIP codes for renters includes:

66224 in Leawood, Kansas
66221 in Overland Park, Kansas
48324 in West Bloomfield, Michgan
78248 in San Antonio, Texas
15228 in Pittsburgh, Pennsylvania
50323 in Urbandale, Iowa
48186 in Northville, Michigan
57005 in Brandon, South Dakota
77401 in Bellaire, Texas
43035 in Lewis Center, Ohio
48335 in Farmington, Michigan
77094 in Houston, Texas
60304 in Oak Park, Illinois
75013 in Allen, Texas
58554 in Mandan, North Dakota

rent rent prices affordable housing

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bang for your buck

These are the 5 most affordable Austin ZIP codes for renters