Is Moving From California to Hudson Bend Worth It? Here's the Money Math

Is moving from California to Hudson Bend, Texas worth it financially?

For many California homeowners, it can be. But it is not as simple as saying, “Texas has no state income tax, so I’ll save money.”

That is only part of the picture.

You also need to look at property taxes, homeowners insurance, the equity in your California home, and what your monthly housing costs may look like after the move.

I made the California-to-Texas move myself, and I can tell you that the numbers can look very different from one household to another.

For some people, the savings are significant.

For others, the financial difference is much smaller than they expected.

So before you decide that moving to Hudson Bend will automatically save you money, here are the numbers worth looking at.

The Short Answer: Who May Save the Most?

The move may make more financial sense if:

• You currently pay a meaningful amount of California state income tax.

• You bought your California home more recently, so your property tax basis is closer to its current value.

• You plan to buy a less expensive home in Hudson Bend.

• You can use your California equity to reduce the size of your new mortgage.

The numbers may be tighter if:

• You have owned your California home for 15 or 20 years and have a low property tax bill.

• You are retired and most of your income comes from Social Security.

• You plan to buy a larger, more expensive, or waterfront home in Hudson Bend.

That does not mean moving is a bad idea.

It simply means you should know whether you are moving mainly to save money, for the lifestyle, or for a combination of both.

1. No Texas State Income Tax Can Be a Big Savings

Texas does not have a state personal income tax.

California does, and the tax rate increases as income goes up.

One of the easiest ways to estimate your potential savings is to look at your most recent California state tax return.

How much did you actually pay in California state income tax?

If your income stays about the same after moving and you no longer have California-source income, that amount gives you a starting point for estimating what could change.

People who may see larger savings include:

• Dual-income households

• Higher W-2 earners

• Business owners

• Self-employed households

• Retirees taking larger IRA, 401(k), or pension distributions

But there is an important exception.

If most of your retirement income comes from Social Security, your savings may be smaller than you expect because California already does not tax Social Security benefits.

And if you continue working in California after you move, your tax situation can become more complicated.

That is something I would discuss with a CPA before assuming that your California income tax bill disappears completely.

2. Property Taxes Can Change the Math Quickly

This is the part I see people underestimate the most.

What You May Be Giving Up in California

California's Prop 13 can be very valuable if you have owned your home for a long time.

Your property taxes are based on your assessed value, not necessarily what your home could sell for today.

And that assessed value generally cannot increase by more than 2% per year until the property changes ownership.

That means someone who bought a California home many years ago may be paying property taxes based on a value far below today's market value.

If you are 55 or older, Prop 19 may also allow you to transfer your tax basis when buying another home in California.

But that benefit does not follow you to Texas.

Once you sell and move out of state, you are starting over with the Texas property tax system.

What Property Taxes Look Like in Hudson Bend

Texas does not have a Prop 13-style system.

Homes are regularly reappraised, and your property taxes are based on the home's taxable value and the tax rates for the area.

Hudson Bend is unincorporated, so there is no city property tax.

But homeowners can still pay taxes to Travis County, Lake Travis ISD, and other local taxing districts.

The exact tax rate can vary by property, so I would always look at the actual tax history of the home you are considering instead of relying on a general percentage.

Two things can help if the home becomes your primary residence.

Homestead Exemption

Texas homeowners may qualify for a homestead exemption on their primary residence.

Eligible homeowners who are 65 or older or disabled may also qualify for additional exemptions.

You have to apply for the exemption. It is not something I would assume happens automatically.

Homestead Appraisal Cap

Once the property qualifies for a homestead exemption, Texas also limits how quickly the taxable value can increase from year to year.

It is not the same as California's Prop 13, but it can help reduce large jumps in taxable value over time.

A Simple Side-by-Side Example

Here is an example just to show how different the numbers can be.

Let's say you bought your California home in 2008 for $300,000.

Because of Prop 13, your assessed value today could still be much lower than the home's current market value.

Your annual property tax bill might be around $4,700.

Now compare that with a home in Hudson Bend.

One Hudson Bend Colony home with an appraised value of around $872,000 had an annual property tax bill of roughly $14,500.

That is close to a $10,000 difference each year.

So imagine a household that saves $8,000 a year by leaving California's state income tax.

The higher Texas property taxes could potentially wipe out that savings.

But if the same household saves $30,000 a year in California income taxes, the move could still make financial sense.

That is why I do not like comparing California and Texas with one simple statement such as, “Texas is cheaper.”

Sometimes it is.

Sometimes it isn't.

It depends on your income, your current property taxes, and the home you choose in Texas.

3. Moving to Texas Does Not Erase Taxes on Your California Home Sale

Another common misunderstanding I hear is:

“We'll move to Texas first, sell the California house afterward, and avoid California taxes.”

It does not work that way.

If you sell California real estate, the gain can still be considered California-source income even if you are living in Texas when the sale closes.

The good news is that many homeowners may qualify for the federal home-sale exclusion.

If you owned and lived in the home for at least two of the last five years, you may generally be able to exclude up to:

• $250,000 of gain if you are single

• $500,000 of gain if you are married filing jointly

California generally follows the same exclusion.

If your gain is higher than the exclusion amount, you may owe taxes on the remaining gain.

This is one area where I strongly recommend talking with a CPA before selling, especially if you have owned the property for many years.

What If You Keep the California Home?

That can also change the tax picture.

If you keep your California home as a rental, the rental income can continue to be taxable in California.

If you keep the home available for your own use, it may also make your residency situation more complicated.

This is general information, not tax advice. Your CPA can look at your income, equity, timeline, and ownership structure and tell you how the rules apply to you.

4. Don't Forget the Costs That Aren't on Your Tax Return

Taxes are only part of the cost of living.

There are a few other expenses I would compare before making the move.

Homeowners Insurance

Do not automatically assume homeowners insurance will be cheaper in Texas.

Texas insurance costs can be affected by hail, wind, roof age, and other factors.

Some policies may also handle older roofs differently than what you are used to in California.

If you are considering a home in Hudson Bend, get an insurance quote on that specific property before your option period ends.

The actual house matters.

HOA, Septic, and Utilities

Hudson Bend is a little different from a typical master-planned community.

Many homes do not have an HOA, which some buyers love. Others do.

Many properties also use septic systems instead of city sewer.

That means you may need to budget for septic inspections, pumping, and future maintenance.

Utilities can vary by address too.

Much of the Lake Travis area is served by Pedernales Electric Cooperative, while water service may come from a local district or another provider.

And yes, Texas summers mean you should pay attention to cooling costs.

I always recommend asking for the seller's recent utility history when possible.

Sales Tax

Hudson Bend's combined sales tax rate is 8.25%.

So sales tax is probably not where you are going to see major savings.

Run Your Own Numbers

You do not need a complicated spreadsheet to get a basic idea of whether the move makes sense.

Start with these numbers:

1. Your current California state income tax

2. Your current California property tax

3. Your current California homeowners insurance

4. Estimated property taxes on the Hudson Bend home you may buy

5. A Texas insurance quote for that home

6. Any new recurring costs such as HOA, septic maintenance, or utility differences

Compare what you are paying now with what you are likely to pay in Texas.

Then look at your California home separately.

Estimate how much money you may actually walk away with after your mortgage, selling expenses, and any taxes on your gain.

That number is important because the equity from your California home may allow you to buy a Hudson Bend home with a much smaller mortgage.

And in many cases, reducing your mortgage payment can make a bigger difference than any single tax savings.

So, Is Moving From California to Hudson Bend Worth It?

For many working California households, it can make financial sense.

If you currently pay a lot in California state income tax and can move your equity into a less expensive home in Hudson Bend, the numbers may work very well.

But if you have owned your California home for decades, have a very low Prop 13 property tax bill, and live mostly on income that California does not tax, the financial savings may be smaller.

And that is okay.

Not every move has to be about saving money.

You may want Lake Travis nearby.

You may want more space.

You may prefer the slower pace of Hudson Bend.

You may simply be ready for something different.

Those are valid reasons too.

The important part is knowing what the move really looks like financially before you make it.

If the numbers work and you are also thinking about the lifestyle side of the move, you may also want to read:

Is Hudson Bend a Good Place to Move After Leaving California?

and

What You May Miss About California After Moving to Hudson Bend

Frequently Asked Questions

Does Texas have a state income tax?

No. Texas does not have a state personal income tax.

But local governments rely more heavily on property taxes, which is one reason Texas property tax bills can surprise California homeowners.

Can I transfer my Prop 13 tax base to Texas?

No.

Eligible California homeowners may be able to transfer their tax basis to another qualifying property within California under Prop 19.

That tax basis does not transfer to Texas.

Your Hudson Bend home will be taxed under Texas property tax rules.

Will California tax my home sale after I move to Texas?

Possibly.

Selling California real estate can still create California taxable income even after you move.

Many homeowners qualify for the federal home-sale exclusion of up to $250,000 for a single filer or $500,000 for married couples filing jointly.

Your exact situation depends on your gain and other factors, so talk with a CPA before you sell.

Thinking About Making the Move?

I'm licensed in both California and Texas, and I've made the California-to-Texas move myself.

I can help you look at both sides of the move — what your California home may sell for, what you may walk away with, and what your budget could buy in Hudson Bend and the Lake Travis area.

And when we look at homes in Texas, we can also review the actual property tax history instead of guessing based on a general tax rate.

If you're thinking about making the move, let's talk through your options and put together a plan.

Call or text me at 949-484-9486.

Amanda Zito, REALTOR®
Real Broker, LLC
TX TREC #840088 | CA DRE #01740063
SoldByZito.com