What is the REAL property tax rate?

The average effective property tax rate in Texas is 1.63% of your home's assessed value (about $3,872 annually for a typical home), but it varies by county from 1.6% to 2.5%. In new developments with MUD taxes, total rates can reach 3.5%—one of the highest in the U.S.

What is a MUD tax and is it mandatory?

A Municipal Utility District (MUD) tax funds infrastructure like water and sewer in new suburbs via bonds, adding $0.25–$1.40 per $100 of assessed value (e.g., up to $4,200/year on a $300,000 home). It's mandatory on top of regular property taxes and decreases over 20–30 years as bonds are paid off.

How much do toll roads cost?

Active commuters spend $40–$150/month, depending on routes and frequency. TollTag users pay lower rates (e.g., 22¢/mile in North Texas, $0.76–$1.29 on new Austin segments), while pay-by-mail doubles costs—always get a TxTag to save up to 50%.

Are groceries taxed in Texas?

Unprocessed foods like meat, milk, eggs, bread, and fresh produce are exempt. Prepared foods, soda, candy, and alcohol are taxed at the full rate (up to 8.25% combined state/local).

Why is car insurance so expensive?

Rates average $150–$229/month due to high speed limits, 14% uninsured drivers, hail/flood risks, urban traffic, and costly repairs on newer vehicles—Texas ranks costlier than 40+ states.

Do HOAs really impact the cost of living?

Yes, fees average $200–$400/month ($2,400–$4,800/year) for maintenance and amenities in Texas suburbs, plus potential fines for violations—adding 5–10% to housing costs in planned communities.

How much are utilities in summer?

Expect $250–$450+ per month for a standard home, driven by AC usage in 100°F+ heat (up to 80% more than spring averages, based on 1,400+ kWh/month consumption).

Do H-1B companies cover relocation costs?

Big tech firms like Tesla or Oracle in Texas often cover moving expenses (up to $10,000–$15,000), but rarely include hidden costs like deposits, car registration, or visa-dependent fees—check your offer letter for specifics.

Are there hidden fees in renting?

Yes, common 'junk fees' add $50–$100/month: valet trash ($25–$40), pest control ($5–$10), package lockers ($10–$20), plus one-time application/processing fees ($50–$200)—always request full disclosure before applying.

How can I lower my property tax?

File for the Homestead Exemption by April 30 (reduces school taxes by $140,000 on your primary residence as of 2025 voter-approved changes). Over-65/disabled get an extra $10,000; protest appraisals annually for further savings.

Hidden Costs in Texas: Property Taxes, Tolls & The 2025 H-1B Financial Squeeze

Cody Johnson

Author

November 26, 2025

Is Texas truly tax-free? Reveal the hidden costs: MUD taxes, electric spikes & tolls. Essential 2025 budget guide for H-1B holders facing the rumored $100k fee.

Frequently Asked Questions

Find answers to common questions about this topic.

Sources

References and sources used in this article.

Texas Comptroller (Property Tax)https://comptroller.texas.gov/

Power to Choose (Electric Rates)http://powertochoose.org/

Zillow Research (HOA & Housing Data)https://www.zillow.com/research/

Hidden Costs in Texas: Property Taxes, Tolls & The 2025 H-1B Financial Squeeze

Frequently Asked Questions

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