Cost of Living in Texas
Things cost about ▼ 3% less in Texas than the national average.
What Things Cost in Texas
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
Texas is the no-income-tax state that most Americans think of first, and its sheer economic scale backs up the reputation. Four of the ten largest US cities are in Texas. The state has attracted more corporate relocations than any other in recent years (Tesla, Oracle, Caterpillar, Charles Schwab). The cost of living is slightly below the national average statewide, but varies enormously: Austin has become genuinely expensive, while San Antonio, Houston's suburbs, and El Paso remain quite affordable. The hidden cost in Texas is property tax: at roughly 1.68% effective rate, it is among the highest in the nation and is how the state compensates for zero income tax.
Texas at a Glance
Taxes in Texas
Texas has no state income tax. That's money in your pocket that residents of most other states don't keep. The combined sales tax averages 6.25%. Property taxes run about 1.6% of home value, which on a $300,500 median home means roughly $4,808/year.
Cities in Texas
Ranked from least to most expensive. Index 100 = national average.
Explore Texas
FAQ About Texas
For most people, significantly. The median home price in Texas is about $300,000 versus $769,000 in California. There is no state income tax, saving a California transplant earning $100,000 roughly $5,000 to $7,000 per year. The catch is property tax: Texas's 1.68% rate means a $300,000 Texas home costs about $5,040 per year in property taxes. California's rate is lower (0.72%) but on a much more expensive home. Overall, most California-to-Texas moves result in significant savings.
Texas has no state income tax, so it relies more heavily on property taxes to fund schools, roads, and local government. The average effective rate of about 1.68% is the sixth-highest nationally. This can create sticker shock for new homeowners, especially those buying in growing suburban areas where home values have risen. Some Texas school districts have rates exceeding 2%. The property tax bill is the single largest recurring housing cost after the mortgage.
San Antonio and El Paso are the most affordable major cities in Texas, both with costs below the national average. Houston offers good value for a city of its size. Dallas-Fort Worth suburbs vary widely. Austin is the most expensive, with median home prices exceeding $571,000 and a cost of living above the national average. For someone seeking Texas's no-income-tax benefit at the lowest total cost, San Antonio is hard to beat.