Property tax is often the largest fixed annual cost for US real estate investors. For foreign owners, understanding the divergence between states is critical to protecting net yields. Here is how our two primary markets compare:
Texas: High Rates, No Income Tax
Texas funds local services primarily through property taxes since there is no state income tax. In our target Houston neighborhoods, rates typically hover between 2.0% and 2.5% of the assessed value. On a $150,000 property, expect an annual bill of $3,000 to $3,750. While this rate is high, the “landlord-friendly” legal environment and lack of state income tax often offset the cost through simplified compliance and consistent rent growth.
Florida: Moderate Rates & Insurance Trade-offs
In Fort Myers and Tampa, property tax rates range from 1.0% to 1.5% (roughly $1,500–$2,250 on a $150,000 home). Like Texas, Florida has no state income tax. However, investors must be aware that the “Homestead Exemption”—which caps tax increases—does not apply to investment properties. In 2026, the lower tax burden in Florida is often balanced out by higher insurance premiums due to climate risks.
Expert Tip: In both states, remember that a property’s tax value is often reassessed upon sale. Always calculate your ROI based on the projected assessment rather than the seller’s current bill to avoid a “tax shock” in year two.