Fewer Californians are moving to Texas, but more are going to FL and AZ

I remember reading that there were quite a few elderly Texans moving to California for a reason that you probably would not expect: taxes.

Texas does not have a state income tax. They make up for that with high sales tax and high property tax.

California does have a state income tax. It also has a high sales tax, which is about the same average rate as Texas (the state rate is lower in Texas but local rates are high so it comes out about the same). Property taxes are lower in California. It is #16 among states when sorted from low to high property taxes. Texas is #45. Rates are about 2.4x as high in Texas.

Thus if you are a retired homeowner in Texas considering moving to California it comes down to whether the lower property taxes will outweigh state income tax.

California state tax does not apply to Social Security, so if your income is mostly that and low tax investments (like a Roth IRA) it can quite easily turn out that you won't pay much if any California income tax.

I'm wondering if they're downsizing given median home cost in Texas is about $300k versus $750k in California, from a quick search. It's nice to have the extra money go to equity instead of taxes, I'm sure, but I'm not sure how moving to California without the bump in income would make sense from a pure cost of living perspective.

Maybe if they're coming from Austin and moving to somewhere cheaper in California they'd find apples for apples. Austin's always been a little expensive but never anything near where it's gotten the past few years.

Another few interesting facts about Texas property taxes:

- Your primary residence gets a "homestead exemption" that lowers the overall rate and also caps any tax increases to 10% a year.

- If over 65, you can defer paying property taxes indefinitely for a 5% yearly interest rate as long as you don't move. You still owe the taxes, but they'll be taken out of your estate.

I like the 10% cap as it makes costs way more predictable, while still not having the weird effects that a permanent capped tax does where people are still paying tax rates based on a home value from the 1980s.

They are probably downsizing a bit. A little random checking on for sales houses on Redfin gives me the impression that someone with maybe a 2300 sq ft house in San Antonio could get maybe a 1500-1700 sq ft house for about the same price in the the central valley in California (e.g., in Modesto, Merced, or Fresno).

My guess is that it is mostly people who are not living in major cities in Texas moving to not major cities in California.

> If over 65, you can defer paying property taxes indefinitely for a 5% yearly interest rate as long as you don't move. You still owe the taxes, but they'll be taken out of your estate.

"Taken out of your estate" suggests they take the taxes when you die. If you move before you die to you have to pay when you move, or does it still come out of your estate when you eventually die?

> If I were single and in my 20s, SF would be where I go

You're conflating SF and Bay Area. SF is not the Bay Area. SF isn't even in Silicon Valley, technically. The issues with SF are not the issues in SV/BA.

> California is very expensive for what you get

California is crazy expensive. Often I look for alternatives. What would be a good alternative?

I want to be near the ocean. I don't want to freeze in the winter and don't want 100F with 90% humidity in the summer.

Just with that criteria I ruled out most of the country.

But then add the requirement of having good jobs. So what's left?

So, here I remain in California.

You are basically defining your requirements in a way that can only be met California. If California didn't exist, would you jump in the ocean? What I mean is that perhaps one of your requirements could be relaxed so you can get many other benefits. For instance, the "100F with 90%" humidity is greatly mitigated by Air Conditioning or going out very early in the day. When I spent some time in Louisiana, which is crazy hot and humid, I was able to mitigate the heat in the way I describe to the point that it didn't affect my life.