The property tax bills are flowing in. EWWWW!!!
Our Property Tax Breakdown
Okay, so we own two homes. Each home receives three property tax bills – school, county, and water district taxes. Texas doesn’t have state taxes, but property taxes range from 2%-4% of a home’s value in total depending on the exact area. I’m in a 2.8%-3.1% suburb of Houston.
Our rental property is appraised at $110,000, isn’t in a home owner’s association (HOA), and is pretty straight-forward. Our own home is appraised at $262,000 and we get a single homestead exemption on the county tax bill that simply is based on a $247,000 value rather than the full $262,000 value. Our HOA dues are about $720 a year.
I’ve received four tax bills so far and the HOA dues letter. By December 1st, I will receive a total of 6 property tax bills and the one home owner’s association dues letter. Altogether, we will end up paying about $10,000 give or take $1000…
Planned for It – Doesn’t Make It Feel Nice Though
Our rental home is paid off and we don’t escrow with our home’s mortgage. That means that we know that these property taxes will be due each year around December and we plan for it in advance. Specifically, I squirrel away more than $3500 each month into a separate savings account that is only used for quarterly income taxes, property taxes, HOA dues, and home insurances. To put this into perspective, we pay ourselves less than $5500 each month to live on and $3500 of it is put aside for income taxes, property taxes, and home insurances.
Having these planned tax bills saved for makes it way less scary, but it’s still not enjoyable. Who wants to mail away more than $40,000 of their own money each year? Yeah, it’s not fun.
But, paying all of this money means that we made a solid income and own two homes. I keep repeating that to myself as I write the checks…
How do you handle property taxes? If you escrow, do you appreciate it?