What It Costs to Own a Home in Houston

National calculators get Houston wrong in two places, property tax and insurance, and they ignore a third, the MUD. Together those lines can be a third of the monthly payment. This page lists the 2026 rates by taxing entity, the ranges for MUD, insurance, flood, HOA and electricity, and then builds a full monthly budget for a $450,000 home with 10 percent down, with every number sourced.

Property tax by entity, 2026

Texas property tax is the sum of the rates adopted by every unit that covers the address. Inside the City of Houston and Houston ISD there are four layers; suburbs swap in their own city, school district and, usually, a MUD. Rates are per $100 of appraised value.

Outside the city the stack changes with the school district and the city. Established suburbs without a MUD generally land between 2.0 and 2.5 percent; newer master-planned communities with a MUD run about 2.6 to 3.5 percent or more. For comparison, a City of Dallas address in Dallas ISD totals about $2.25 for 2026. The county appraisal district's record for any address lists every unit that taxes it.

MUD taxes: the suburban layer

A municipal utility district borrows to build a subdivision's water, sewer and drainage systems and repays the bonds with its own tax. Rates we see across Greater Houston run from about $0.25 per $100 in mature districts that have retired most of their debt to $1.40 or more in brand-new districts; most fall between $0.50 and $1.00. On a $450,000 home, the difference between a $0.30 district and a $1.20 district is about $4,050 a year, or $338 a month, which is why we check the district before you fall for the house. Texas Water Code Section 49.452 requires the seller to give you a notice of the district's tax rate and bonded debt before a binding contract is signed; a buyer who did not receive it may terminate, and a signed copy is recorded at closing. Our mortgage calculator has a MUD toggle that adds 1 percentage point as a placeholder.

What the homestead exemption does to the bill

School districts must exempt $140,000 of a primary residence's value, and Houston ISD, the City of Houston and the Harris County entities each take a further 20 percent off their portion; owners 65 or older or with a qualifying disability get another $60,000 off school taxes and a school tax ceiling. Once the exemption is in place, your appraised value can rise no more than 10 percent a year, beginning the January after the first year you qualify. Filing is free, the general deadline is before May 1, and a late application is accepted up to two years after the delinquency date with a refund of the difference. On a $450,000 home inside the city, the 2026 bill falls from about $9,590 without an exemption to about $6,580 with one.

Homeowners insurance

For a typical Houston single-family home, $3,000 to $6,000 a year is the range most of our buyers see in 2026. The published averages bracket it: Insurance.com puts the Texas average at $4,582 for $300,000 of dwelling coverage, against a national $2,872, and Insurify's October 2026 Houston figure is $6,084 against $4,668 statewide. Roof age, dwelling value, claims history and the deductible structure drive the quote. Most Houston policies carry a separate wind and hail deductible of 1 to 2 percent of the dwelling coverage, so a $400,000 dwelling can mean a $4,000 to $8,000 deductible on a storm claim. Quote during the option period; the roof's age can decide which carriers will write the policy at all.

Flood insurance

Flood is excluded from homeowners policies and comes from the National Flood Insurance Program or a private carrier. Lenders require it in FEMA special flood hazard areas such as Zone A or AE. Published analyses of FEMA policy data put the typical Harris County NFIP premium between $786 and $1,251 a year, with Houston policies ranging from roughly $770 in low-risk zones to $1,550 and well beyond in high-risk zones. Many owners outside the mapped zones buy it anyway: the Harris County Flood Control District counted 154,170 homes flooded by Harvey, just under half outside the 100-year and 500-year floodplains. Check the address on the FEMA map, read the flood section of the Seller's Disclosure Notice, and see our flood zone guide.

HOA dues

Most master-planned communities and townhome developments have a property owners association; most older Inner Loop neighborhoods do not. In our transactions, master-planned single-family dues typically run $500 to $1,500 a year, with amenity-heavy communities higher and townhome and condo regimes often several hundred dollars a month. Texas Property Code Section 207.003 entitles you to a resale certificate within 10 business days of a written request, for a fee of no more than $375, listing the regular and special assessments, transfer fees, unpaid amounts, known violations and pending lawsuits. We order it during the option period. The Woodlands is the exception to the pattern: its township levies a property tax in place of a conventional master HOA assessment.

Utilities and electricity deregulation

Most of Houston is in the deregulated Texas electricity market: CenterPoint Energy owns the wires and reads the meter, and you choose a retail electric provider and plan through the Public Utility Commission's Power to Choose site or directly. Compare plans on the Electricity Facts Label at the usage level you expect, usually 1,000 or 2,000 kilowatt-hours, because teaser rates at 500 kilowatt-hours rarely match a Houston summer. The Energy Information Administration put the average Texas residential price at 15.91 cents per kilowatt-hour in August 2026, against 18.16 cents nationally. At 1,000 to 1,500 kilowatt-hours a month, typical for a single-family home with summer air conditioning, that is roughly $160 to $240. Water, sewer and trash come from the City of Houston or, in the suburbs, from the MUD itself, and natural gas, where the home has it, from CenterPoint. Ask the seller for 12 months of bills during the option period; the Seller's Disclosure Notice does not include them.

A full monthly example: $450,000 with 10 percent down

Assumptions: a $450,000 purchase inside the City of Houston and Houston ISD, $45,000 down, a $405,000 30-year fixed loan at 7.25 percent (Freddie Mac's average was 7.32 percent on October 22, 2026), the 2.2 percent tax rule of thumb, $4,000 a year of homeowners insurance and conventional mortgage insurance at 0.5 percent of the loan.

Add-ons when they apply: a MUD at a mid-range $0.75 per $100 adds about $281 a month on this home; a $900-a-year HOA adds $75; a low-risk-zone flood policy adds $65 to $105. With 20 percent down instead, the loan is $360,000, principal and interest fall to about $2,456 and the mortgage insurance line disappears, for a total near $3,615 at the sticker tax rate. Every quarter-point change in the rate moves this payment by roughly $65. The calculator lets you change each line.

How Houston owners lower the number

• File the homestead exemption as soon as you move in, and ask the lender to re-run the escrow once the county applies it.
• Protest the appraised value each spring. Notices arrive in April and the deadline is usually May 15; we send our clients a courtesy comparable list every year.
• Check the MUD before you write the offer. A mature district can be half the rate of a new one a mile away.
• Shop insurance during the option period and compare wind and hail deductibles, not just premiums.
• Negotiate seller credits or a rate buydown. With rates above 7 percent, our buyers regularly negotiate credits toward closing costs or a temporary or permanent buydown; see rates, seller credits and buydowns.
• Drop mortgage insurance at 20 percent equity by asking the servicer once the balance falls to 80 percent of value.

Questions buyers ask about Houston ownership costs

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Call or text (832) 777-3904. We speak English and Spanish. Compean Group is a real estate brokerage, not a lender, and does not originate loans.

Updated October 29, 2026.