The Taxes and Costs of Buying a Home in Texas You Need to Know – and How to Prepare for Them in 2025
Buying a home in Texas is exciting, but many buyers focus only on the listing price. The truth is that there are taxes, fees, and additional costs that can impact your total budget.
This doesn’t mean you should be worried—it means you should be well-prepared. With the right guidance, these expenses become predictable and manageable.
Here’s a breakdown from María Aguirre, a trusted Realtor® in Austin, so you know exactly what to expect and how to prepare for a successful purchase in 2025.
1. Property Taxes in Texas
Texas doesn’t have a state income tax, but that is balanced by higher-than-average property taxes.
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Property tax rates usually range from 1.5% to 3.5% of the home’s assessed value.
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In Austin, the average rate is about 1.9%.
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Example: a $450,000 home may mean around $8,550 per year in property taxes.
María’s Tip: always ask about the exact county tax rate before making an offer.
2. Closing Costs
These are the fees paid at the end of the transaction and typically equal 2% to 5% of the purchase price.
They can include:
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Title company fees.
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Recording and administrative charges.
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Notary and legal documentation.
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Mortgage origination fees (if applicable).
Example: for a $400,000 home, closing costs may range between $8,000 and $20,000.
3. Homeowners Insurance
Lenders require homeowners insurance, and in Texas, the annual cost can range between $1,800 and $3,000.
Additionally, in flood-prone areas, you may need Flood Insurance, which is an extra policy.
4. HOA Fees and Maintenance
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Homes in private communities often have HOA (Homeowners Association) fees, which may range from $30 to over $200 per month.
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Add ongoing costs: lawn care, HVAC servicing, and unexpected repairs.
5. Inspections and Appraisals
Before closing, buyers usually cover:
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Home inspection: $300–$600.Appraisal: $400–$700 (required if you’re financing).
FAQs: Taxes and Costs in Texas
How much should I budget for additional costs when buying in Texas?
Plan for about 7%–10% of the purchase price to cover taxes, closing costs, and fees.
Is Texas really more affordable than other states?
Yes, in purchase price, but property taxes and insurance must be factored into the total cost.
How can I avoid surprises at closing?
Work with a Realtor® like María Aguirre, who requests detailed cost estimates early and helps you plan accurately.
Buying a home in Texas in 2025 means more than just looking at the sticker price. Knowing the taxes and costs you need to prepare for allows you to plan wisely and move forward with confidence.
With María Aguirre’s professional guidance, you’ll know every detail up front—so your home purchase in Austin is not only exciting but also financially secure.
