Texas has significantly higher property taxes than California—1.60% vs 0.71% average effective rate. On a $500,000 home, you'd pay roughly $8,000/year in Texas versus $3,550 in California. However, Texas has no state income tax while California's reaches 13.3%. For most homeowners, the total tax burden depends on income level: high earners often still save in Texas despite property taxes, while middle-income earners may pay more overall.

By CountryTaxCalc Research Team

Last Updated: March 2026

The Big Picture

🌴 California

0.71%

Avg Effective Rate

Base 1% (Prop 13) plus local bonds/assessments

🤠 Texas

1.60%

Avg Effective Rate

No state income tax offset by high property tax

Typical Annual Savings

At $500,000 home income:

$4,450

That is $371/month back in your pocket!

Tax Savings by Income Level

IncomeCA TaxTX TaxSavings10-Year
$300,000 home $2,130$4,800$2,670$26,700
$400,000 home $2,840$6,400$3,560$35,600
$500,000 home $3,550$8,000$4,450$44,500
$750,000 home $5,325$12,000$6,675$66,750
$1,000,000 home $7,100$16,000$8,900$89,000
$1,500,000 home $10,650$24,000$13,350$133,500

California Pros and Cons

✅ Pros

  • Lower property tax rates (Prop 13 cap)
  • Assessed value grows max 2%/year
  • Predictable long-term property costs
  • Transfer of tax basis (Prop 19)

❌ Cons

  • High income tax (up to 13.3%)
  • High home purchase prices
  • Local bonds/Mello-Roos add to rate
  • New buyers pay more than long-term owners

Texas Pros and Cons

✅ Pros

  • No state income tax
  • Lower home prices than CA
  • Homestead exemption ($100K off value)
  • Over-65 school tax freeze

❌ Cons

  • Property tax 2x+ California rate
  • No cap on assessment increases
  • High insurance costs in some areas
  • MUD/special district taxes add up
💡

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Frequently Asked Questions

Q: Why is Texas property tax so much higher than California?

Texas relies heavily on property tax to fund schools and local government because it has no state income tax. California's Proposition 13 (1978) caps property tax at 1% of purchase price plus max 2% annual increases. Texas has no such cap—properties are reassessed at full market value regularly.

Q: Does high property tax make Texas more expensive than California?

Not necessarily. A $500K Texas home costs ~$4,450 more in property tax than California. But if you earn $150,000, you'd pay ~$11,000 in California income tax and $0 in Texas. High earners typically save in Texas overall; middle-income homeowners with expensive homes may pay more.

Q: What is California's Proposition 13?

Prop 13 (1978) limits California property tax to 1% of assessed value at purchase, with maximum 2% annual increases regardless of market value changes. This means longtime homeowners often pay far less than new buyers on identical homes. Prop 19 (2020) allows seniors to transfer their tax basis when moving.

Q: What exemptions reduce Texas property tax?

Texas offers a homestead exemption removing $100,000 from taxable value for school taxes. Seniors (65+) get an additional $10,000 exemption and can freeze school taxes. Disabled veterans may qualify for full exemption. These can reduce a $500K home's taxable value to $390K.

Related Comparisons

CA vs TX Income TaxCalifornia CalculatorTexas Calculator