By Eric Berman, REALTOR® | The Eric Berman Team at Compass
TL;DR:
Housing is dramatically cheaper and Texas has no state income tax — both true, and both the reason the property tax comparison gets stated backwards. Texas funds itself largely through property taxes and its rates are among the highest in the country. What makes the math work is that assessed values are far lower, plus a homestead exemption and an appraisal cap that require application and residency to obtain. A Nassau seller should compare actual annual bills on specific properties rather than assuming the no-income-tax headline settles the question. And in newer suburban developments, a separate MUD levy can sit on top of everything.
Start With the Long Island Sale
The transaction that governs this move happens here. It sets the budget, the timeline, and whether the household moves on its own schedule.
Before touring anything in Dallas, a seller should know what the current home realistically nets — commission, New York State Transfer Tax at four dollars per thousand, attorney fees generally $1,500 to $3,500, preparation spending, and carrying costs for a listing period longer than hoped. The full breakdown of what a Long Island sale costs covers each line.
One item specific to interstate moves. A seller who establishes Texas residency before the Long Island closing becomes a New York nonresident for that transaction, triggering Form IT-2663 — an estimated payment at closing of 8.82 percent of net gain. It's a prepayment against actual New York liability rather than an additional tax, refundable where the real number comes in lower. But it reduces the wire, which catches sellers who have already committed those proceeds to a Dallas purchase.
For anyone selling a long-held Long Island home, capital gains deserve attention. The primary-residence exclusion covers $250,000 for a single filer and $500,000 filing jointly, and decades of appreciation frequently exceed it — improvement records reduce the taxable figure substantially. The full treatment of how gain is calculated covers the mechanics.
The Tax Trade Nobody States Completely
Texas has no state income tax. That's real, it's substantial for a household with meaningful earned income, and it's the reason most people look at Texas in the first place.
What gets left out is where the money comes from instead. Texas funds schools, counties, and municipalities largely through property taxes, and its property tax rates are among the highest in the nation. The two facts are connected — a state without an income tax collects elsewhere.
Why the math still often favors Texas: assessed values are far lower. A high rate applied to a $550,000 assessment produces a different bill than a lower rate applied to a $1.3 million Nassau assessment. For many households the total is genuinely less.
But "genuinely less" is not "much lower," and the gap is narrower than the headline suggests. A Nassau seller moving to a Dallas-area home in the mid-six figures may find the annual property tax bill closer to what they were paying than expected — and in certain districts, comparable or higher.
Two things mitigate the rate, and both require action rather than arriving automatically.
The homestead exemption reduces the taxable value of a property serving as the owner's principal residence. It requires application and it requires the property to actually be the primary residence — which matters for anyone considering keeping a Long Island property.
The appraisal cap limits how much the appraised value of a homesteaded property can increase year over year. For a long-term owner that provision can matter more than the rate itself, because it constrains how quickly the bill grows. It also applies only to homesteaded property.
Rates, exemption amounts, and cap provisions are set at state and local level and change. Confirm current terms with a Texas professional rather than relying on any article.
The Levy That Isn't in the Listing
This is the local complication most likely to surprise a Long Island buyer, and it doesn't appear in a listing price.
Many newer suburban developments across the Dallas metro sit within a Municipal Utility District — a special taxing entity created to finance water, sewer, and drainage infrastructure for developments outside existing municipal service areas. A MUD levies its own tax on top of county, city, and school district taxes.
The practical consequence: two similarly priced homes in different developments can carry meaningfully different total tax burdens, and the difference isn't visible in the asking price. MUD rates also change as the district's debt is repaid, which means the figure a seller quotes may not be the figure in five years.
None of this makes a MUD property a poor purchase — the infrastructure had to be paid for somehow, and these developments are often newer and better serviced. What it requires is knowing. Before making an offer on any Dallas-area property, ask specifically whether it lies within a MUD and what the combined tax rate actually is, then pull the current annual bill.
Buying Works Differently Here
Texas is a title company state, and that's a genuine adjustment from New York.
In New York, contract drafting and negotiation are legal work reserved to licensed attorneys, and the seller's attorney coordinates title and payoff and runs the closing. In Texas, residential transactions are handled through title companies using standardized promulgated forms, with no attorney necessarily involved on either side.
A buyer who wants legal review retains counsel separately and pays for it. Many relocating New Yorkers do exactly that, and it's worth deciding in advance rather than partway through. The fuller picture of what the attorney handles on the New York side describes what you'd be giving up.
Two other differences worth noting. HOAs are extremely common in Dallas-area suburban developments, with monthly or annual dues and covenants governing exterior appearance and use — read them before making an offer, not after. And Texas is a non-disclosure state, meaning sale prices are not public record. That makes independent verification of comparable sales harder than in New York and increases reliance on a local agent with MLS access.
Practical Logistics
The move runs roughly 1,500 miles — a genuine long-distance relocation. Interstate movers should be booked well ahead, and vehicle transport is usually cheaper than driving.
Climate is a real adjustment in both directions. Summers are long and hot, with extended stretches above ninety degrees. Winters are mild. Severe weather is a genuine consideration — the metro sits in a region that experiences significant storms, and windstorm and hail coverage affects insurance costs meaningfully. Get actual quotes on specific properties rather than assuming.
The metro is car-dependent and spread across a very large area. DART provides rail and bus service, but coverage is limited relative to the region's footprint. Commute times vary substantially and should be tested at the hour they'd actually be driven.
On sequencing: selling the Long Island home first produces clean funds, a defined budget, and a purchase offer carrying no contingency on another sale — which matters more at 1,500 miles. Buying first means carrying both properties, frequently $12,000 to $16,000 monthly combined at Long Island price points.
A Worked Example
Consider a composite case — a Nassau County household relocating for a position in the northern Dallas suburbs, selling a colonial that comped near $1,150,000.
They ran the tax comparison properly rather than assuming. Their Nassau bill was substantial; the Texas properties they liked, in the mid-six figures, produced annual bills that were lower but far closer than they'd expected — and one, in a MUD district, came in higher than a similarly priced home two developments over.
That MUD difference wasn't visible in either listing. They found it by asking.
They also learned that no attorney would be running the Texas closing and retained one separately for contract review, which they wanted given the size of the transaction.
On the New York side, they sold first. Their attorney ran an early title review that turned up a 2014 permit never closed out — six weeks to resolve, entirely before listing. They closed in April, spent five weeks in a short-term rental, and bought in Texas with cash in hand and no sale contingency.
Where to Start
Get a real number on the Long Island home and build the net-proceeds model before touring anything. Call the town or village building department and ask what permits are on file. Engage a New York real estate attorney early. Talk to a CPA about the IT-2663 and capital gains questions before setting a closing date.
On the Texas side: pull the actual annual property tax bill on any specific property, ask whether it sits in a MUD, and ask what the combined rate is. Confirm what the homestead exemption and appraisal cap require. Get insurance quotes on specific addresses. Read HOA covenants before offering. And decide whether you want your own counsel, since none comes with the closing.
Sellers wanting a current read on where their Long Island home sits can start with a quiet look at present value, and more market and process coverage lives in Local Insights.
The Honest Bottom Line
Dallas is substantially more affordable than Long Island and the absence of a state income tax is a genuine advantage. Most households moving this direction improve their position.
What deserves honesty is the property tax picture, because the version most relocation content offers is incomplete. Texas rates are high — that's how the state funds itself without an income tax — and what makes the total work is lower assessed values plus a homestead exemption and appraisal cap that require application. Comparing actual annual bills on actual properties is the only way to know, and a MUD levy can change the answer between two homes on adjacent streets.
For anyone working through what their Long Island home would net before any of that begins, that conversation is available whenever the timing suits.
This is general information, not legal, tax, insurance, or financial advice. Texas property tax rates, exemption criteria, appraisal cap provisions, and MUD levies are set at state and local level and change over time. Confirm current specifics with a Texas attorney, accountant, and the relevant appraisal district, and confirm New York specifics with a licensed New York real estate attorney and a CPA.
FAQs
Are property taxes really lower in Texas than on Long Island?
The picture is more complicated than most relocation content suggests. Texas has among the highest property tax rates in the nation — that's how the state funds itself without an income tax, and the two facts are connected. What makes the total often lower is that assessed values are far below Nassau County's. For many households the annual bill is genuinely less, but the gap is narrower than expected, and in some districts it can be comparable or higher. Pull the actual annual bill on specific properties rather than relying on the no-income-tax headline.
What is a MUD district and why does it matter?
A Municipal Utility District is a special taxing entity created to finance water, sewer, and drainage infrastructure for developments outside existing municipal service areas — common across newer Dallas-area suburbs. A MUD levies its own tax on top of county, city, and school district taxes. The consequence is that two similarly priced homes in different developments can carry meaningfully different total tax burdens, and the difference isn't visible in the asking price. Ask specifically whether a property sits in a MUD and what the combined rate is before making an offer.
Does Texas require an attorney to buy a home?
No, and this is a real adjustment for New York sellers. Texas is a title company state — residential transactions are handled through title companies using standardized promulgated forms, with no attorney necessarily involved on either side. New York reserves contract drafting and negotiation to licensed attorneys, with each party represented. A buyer who wants legal review in Texas retains counsel separately and pays for it, which is worth deciding before the transaction starts rather than partway through.
What is the Texas homestead exemption?
A reduction in the taxable value of a property serving as the owner's principal residence, along with a cap limiting how much the appraised value of a homesteaded property can increase year over year. Both matter substantially given Texas's high rates, and the cap can matter more than the rate itself for a long-term owner because it constrains how quickly the bill grows. Both require application rather than applying automatically, and both require the property to actually be the primary residence — relevant for anyone considering keeping a Long Island property.
Should I sell my Long Island home before buying in Dallas?
Generally yes at this distance. Selling first produces clean funds, a defined budget, and a purchase offer with no contingency on another sale — which matters more at 1,500 miles, where coordinating simultaneous closings is impractical. The trade-off is potentially needing temporary housing. Buying first means carrying both properties, frequently $12,000 to $16,000 monthly combined at Long Island price points, and it may also affect which property qualifies as a primary residence for Texas homestead purposes.
By Eric Berman, REALTOR® | The Eric Berman Team at Compass
Eric Berman | Long Island & Queens Associate Broker | Compass
1468 Northern Blvd, Manhasset, NY 11030
(917) 225-8596 | eric@ericbermanre.com | theericbermanteam.com
