Texas has high property tax rates, but some of the lowest sales tax rates in the country (6.25%), and no income tax.
It it is the higher property tax rates that cause property prices to be lower, so that the actual property tax paid is not too high compared to a low property tax rate/high property value state like California.
Effectively a lot of the money that, in California, goes to landlords or housing investors, in Texas goes to the state via taxes on land.
This is due to the superior efficiency of land taxes versus income taxes. Land taxes are "free" money that do not hurt economic activity. But property taxes cover both land and structure, so it's not the perfect tax system - however it's pretty close.
Thanks for clarifying. It's been a while since I lived in Texas. I also recall being taxed yearly on my cars to pay for the schools, which was not onerous but struck me as unusual. Is that still a thing?
In terms of it funding schools, it's fungible money going into state or local coffers, so that's more of a political thing to justify the fee. Schools get some funding from the state and the rest from local government. The fungibility of money must be one of the best kept secrets in politics.
It it is the higher property tax rates that cause property prices to be lower, so that the actual property tax paid is not too high compared to a low property tax rate/high property value state like California.
Effectively a lot of the money that, in California, goes to landlords or housing investors, in Texas goes to the state via taxes on land.
This is due to the superior efficiency of land taxes versus income taxes. Land taxes are "free" money that do not hurt economic activity. But property taxes cover both land and structure, so it's not the perfect tax system - however it's pretty close.