Houston, TX Taxes 2025
Complete local tax guide and OBBBA calculator
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Houston Tax Overview 2025
No state income tax plus OBBBA deductions make Houston very tax-friendly.
Local Income Tax
0%
City/county rate
Sales Tax
8.25%
State + local
Property Tax
1.82%
Effective rate
Median Home
$240,000
Home value
No Local Income Tax!
Houston does not impose a local income tax on residents, which means you only pay state income tax (if applicable) and federal taxes.
State Tax Information
Houston is located in Texas (0% state income tax)
💼 Houston Local Income Tax
Houston does not impose a local income tax on residents. Your income tax obligations are limited to state income tax (if applicable in Texas) and federal income tax.
This is good news for Houston residents, as it means one less tax to worry about compared to cities that do impose local income taxes.
Total Income Tax Burden in Houston
🛒 Houston Sales Tax 2025
The combined sales tax rate in Houston is 8.25%. This includes both the Texas sales tax and any local sales taxes.
Sales tax applies to most retail purchases in Houston. Some items like groceries, prescription medications, and clothing may be exempt or taxed at reduced rates depending on Texas law.
Sales Tax Breakdown
Sales Tax Examples
| Purchase Amount | Sales Tax | Total |
|---|---|---|
| $50 | $4.13 | $54.13 |
| $100 | $8.25 | $108.25 |
| $500 | $41.25 | $541.25 |
| $1,000 | $82.50 | $1,082.50 |
🏠 Houston Property Tax 2025
The average effective property tax rate in Houston is 1.82%. Based on the median home value of $240,000, the typical homeowner pays approximately $4,368 per year in property taxes.
Property taxes fund local services including schools, police, fire departments, roads, and parks. Rates vary by specific location within Houston based on school district and other taxing authorities.
Estimated Annual Property Tax in Houston
| Home Value | Annual Tax | Monthly | SALT Deductible? |
|---|---|---|---|
| $200,000 | $3,640 | $303 | ✓ Yes |
| $300,000 | $5,460 | $455 | ✓ Yes |
| $400,000 | $7,280 | $607 | ✓ Yes |
| $500,000 | $9,100 | $758 | ✓ Yes |
| $750,000 | $13,650 | $1,138 | ✓ Yes |
| $1,000,000 | $18,200 | $1,517 | ✓ Yes |
💡 SALT Tip: Under the OBBBA, you can deduct up to $40,000 in state and local taxes (SALT) on your federal return. This includes property taxes, state income taxes, and local income taxes.
💰 Houston Cost of Living
Housing Costs
Tax Summary
OBBBA Tax Benefits for Houston Residents
Service and energy sector workers benefit from tips and overtime deductions.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several federal tax deductions that can significantly reduce your tax burden as a Houston resident.
Available OBBBA Deductions:
Calculate Your Houston Tax Savings
Use our free OBBBA calculator to see exactly how much you could save on your 2025 federal taxes as a Houston resident.
Calculate My SavingsFrequently Asked Questions
What is the sales tax in Houston?
The combined sales tax rate in Houston is 8.25%. This includes both state and local sales taxes.
Does Houston have a local income tax?
Houston has a local income tax of 0%. This is in addition to any state and federal income taxes.
What is the property tax rate in Houston?
The average effective property tax rate in Houston is 1.82%. On a home worth $240,000, you'd pay approximately $4,368 per year.
How do OBBBA deductions benefit Houston residents?
Service and energy sector workers benefit from tips and overtime deductions. You can use our free calculator to estimate your total savings from tips, overtime, auto loan interest, SALT, and senior bonus deductions.