When you’re looking for a new home do you consider the tax rate before you buy? You may be surprised at how much differing tax rates can change the cost of your new home. For example, if you purchase a $300,000 home in a community with a 2.3% tax rate the annual taxes would be about $6,900. A similar home in a tax district that has 3.2% tax rate would cost you about $9,600 per year, that’s a difference of $225 per month.
What causes such a difference in tax rates? Tax rates vary by school district, some areas have Municipal Utility Districts ( MUDS) which were set up to bring utility infrastructure to an area before that area was serviced by the local city services. The tax district could have additional Emergency Service Districts (ESD) or community college taxes.
In some cases, taxes can vary dramatically between neighborhoods that may be next door to each other. The bottom line is it’s very important to consult with your Realtor or Lender to make sure you’re aware of the tax rate before you purchase.
Here is a link to a very good article showing the school tax rates in the Austin area. The interactive map has been embedded below in case you’d like to conduct a bit of research.
Keep in mind these are only the school tax rates and are not the total tax rates for the home in that area. Please let us know if you have any questions about the information in this article.