If you’re eyeing Austin, Texas, as your next home—whether for retirement, a job relocation, or just a change in scenery—here’s the lowdown on what to expect tax-wise in 2024.
According to the U.S. Census Bureau, “Austin outpaced every other metro area in the nation from 2010 through 2019, and in 2020 (the latest figures), was the fastest-growing metropolitan area.” On average, the city gains 168 new residents daily, largely due to relocations. That trend shows no signs of slowing down.
❓ What are Taxes Like?
Even though you won’t pay personal state income tax (a huge bonus for people moving from states with high tax rates such as California and New York). The current total sales tax in Austin is 8.25 percent. While the county doesn’t currently impose a sales tax, the state charges a state sales tax of 6.25 percent. Austin adds to that a city sales tax of 2 percent. One percent of the city’s sales tax goes towards the improvement of its public transportation system.
While Texas doesn’t have a state income tax, it makes up for it in property taxes. According to Tax-Rates.org, the median property tax in Austin is \$1,903 per year for a home that is worth approximately \$150,000. Currently, the average median listing home price in the city is $579,000. Based on those figures, if you move to Austin, expect to pay at least \$6,000 annually in property taxes for a home slightly below the median home price.
For people moving from historically expensive cities such as Los Angeles, San Francisco, or New York (where many of Austin’s recent transplants have come from), it still works out to a lower cost of living. But for folks moving from smaller Texas towns or mid-sized cities, it’ll feel like more of a squeeze.
❓ Why Are Businesses Moving to Austin?
Austin-based economist Jon Hockenyos told national attendees of a 2021 forecasting event that Austin will be “one of the great global cities of the 21st century.”
It’s worth noting that along with a lower comparable cost of living, businesses that move or expand to Austin will also get exceptional business incentives and be privy to some of the lowest tax rates in the country.
The state of Texas has neither corporate or personal income tax — a boon for businesses and their employees. Business incentives range from sales tax and franchise tax exemptions for qualified businesses. Additionally, the state offers waived permit fees, property tax abatements, grants, and local funding for relocating or expanding businesses.
Additionally, the city of Austin has a Business Expansion Incentive Program that rewards qualifying businesses that perform in certain target areas with tax reimbursements and wage reimbursements.
Real estate opportunities are still readily available, especially for expanding businesses or manufacturing companies that require larger warehouse spaces. With a median salary of $93,000, the economy is strong, and businesses will have access to a talent pool full of smart professionals.
💡Additional Business Relocation Costs to Consider
Before you pack up, make sure you’ve accounted for all the potential costs:
- ✅ Deposits and/or lease fees for new office space
- ✅ Business registration fees or any fees tied to dissolving, reforming, merging, relocating, or converting your business
- ✅ Potential loss of productivity and revenue during the move
- Employee relocation costs
- ✅ Marketing costs to inform clients about your new location
- ✅ Insurance costs for the move and for relocating employees
- ✅ One-time setup costs for the new office and employees: utilities, IT, furniture, cleaning, etc.
For a full list of Austin’s economic incentives, visit the Austin Chamber of Commerce website.
❓What is Austin’s Cost of Living?
Austin’s cost of living is higher than the national average, with a living index of 109—9 percent above the norm. Housing is a significant factor, but you’ll also pay more for healthcare, goods, and services in Austin.
❓What is Austin’s Real Estate Market Like?
The median listing home price in Austin is $579,000, with an average of $320 per square foot—much higher than the national median of $374,900. Depending on the neighborhood, you might pay even more. Areas like Circle C, Bee Cave, Westlake, and East Austin are known for their steep prices.
Homeownership is at 44 percent in Austin, meaning more than half of the city’s residents rent. A significant portion of renters (35 percent) pay between $1,501 and $2,000 monthly, while 20 percent pay more than $2,000.
❓Does Austin, Texas, Pay You to Move There?
While you won’t get paid to move to Austin, the city is part of a guaranteed income program that redistributes local taxes to lower-income families.
Ready to Move? We’ve Got Your Back.
We help business owners navigate the complex world of taxes, ensuring you stay compliant while minimizing your tax liabilities. Planning a move to Austin? Let us help you calculate your tax bite and make sure you’re maximizing your deductions when tax season rolls around. Reach out today, and let’s turn your big move into a smart move.