$110K Salary in Austin vs. Raleigh: Texas's Property Tax Bill vs. North Carolina's Declining Income Tax and the Real Annual Cost Gap
$110K Salary in Austin vs. Raleigh: Texas's Property Tax Bill vs. North Carolina's Declining Income Tax and the Real Annual Cost Gap
The Scenario
You're a remote worker — or you've just received a relocation offer — and you've narrowed your Sunbelt shortlist to two cities: Austin, TX and Raleigh, NC. Both are fast-growing. Both have absorbed enormous migration since 2020. Both get marketed as "affordable alternatives" to coastal metros.
But can you actually afford to live there on $110K? Will you take home more or less money after you move? And which city's affordability reputation is real versus residual — based on prices from a housing market that no longer exists?
The answer hinges on a comparison most people get wrong: Texas has no income tax, so Austin must win. It doesn't — at least not if you're buying a home. Here's the math.
The Tax Story: No Income Tax vs. a Declining Flat Rate
Texas has no state income tax. That's a real, tangible advantage. On a $110K salary, it puts an extra $4,218 per year in your pocket compared to Raleigh.
Here's the calculation: North Carolina runs a flat income tax. The 2026 rate is 4.25% — down from 4.5% the prior year, and scheduled to drop to 3.99% in 2027 under the ongoing rate-cut trajectory the state legislature has held for several consecutive years. After applying North Carolina's single-filer standard deduction of approximately $10,750, your taxable NC income is roughly $99,250. At 4.25%, that's a state income tax bill of $4,218 per year.
In Texas: $0.
| Tax Category | Austin (TX) | Raleigh (NC) |
|---|---|---|
| State income tax | $0 | $4,218 |
| Combined sales tax rate | 8.25% | 7.25% |
| Est. annual sales tax (on $30K purchases) | $2,475 | $2,175 |
| Sales tax annual gap | — | $300 less in Raleigh |
Net the sales tax difference, and Austin holds a $3,918 annual tax advantage. On a $110K income, that's real money.
But this is also where most cost-of-living comparisons stop — and where most people make an expensive mistake.
It's worth noting that the Institute on Taxation and Economic Policy's State Rundown published in late June 2026 highlights that states nationwide are actively debating new revenue proposals as budgets tighten. North Carolina has been moving in the opposite direction with sustained tax cuts, but the broader environment is a reminder that today's tax advantages are never guaranteed. Model your decision on current law, not permanent assumptions.
The Housing Math: Where the Real Annual Gap Lives
Texas funds its public services without an income tax through one primary mechanism: property taxes. In the Austin metro, effective rates in Travis County run approximately 2.15% — among the highest effective rates in the country for a major metro.
With Austin's median home price sitting at roughly $525,000 in mid-2026 (down from its peak but still approximately 45% above 2019 levels after the post-pandemic run-up), that property tax rate produces an annual bill of $11,288.
In Wake County (Raleigh), the effective property tax rate is approximately 0.77%. With a median home price of around $430,000, annual property taxes come to $3,311.
Property tax gap: $7,977 per year — in Raleigh's favor. That single line item more than doubles Austin's income tax advantage.
Full Homebuyer Cost Model
Modeling a 10% down purchase at the June 2026 average 30-year fixed rate of approximately 6.70%:
| Cost Component | Austin ($525K home) | Raleigh ($430K home) |
|---|---|---|
| Down payment (10%) | $52,500 | $43,000 |
| Loan amount | $472,500 | $387,000 |
| Monthly principal and interest | $3,070 | $2,514 |
| Annual mortgage cost | $36,840 | $30,168 |
| Annual property tax | $11,288 | $3,311 |
| Annual homeowner's insurance | ~$2,400 | ~$1,800 |
| Total annual housing cost | $50,528 | $35,279 |
| Annual housing gap | — | $15,249 less in Raleigh |
SmartAsset's analysis of state of residence for tax purposes makes a point that's easy to underweight: housing is the dominant cost variable for most households, and it's the one that interacts most directly with the state's property tax framework. In Texas, you're not avoiding taxes — you're paying them through your mortgage statement.
The net result for a homebuyer on $110K: after crediting Austin's income tax advantage, Raleigh costs approximately $11,331 less per year to live in — once you account for the full housing picture.
This is exactly the kind of full-stack analysis Vontari builds for your specific salary, housing budget, and household situation — so you're modeling your move, not an average.
What If You're Renting?
The picture shifts meaningfully for renters. You don't absorb Austin's property tax bill directly — your landlord does, and passes some portion through in rent, but the relationship isn't dollar-for-dollar.
Current 2BR apartment rents in the Austin metro average approximately $1,750/month. Comparable units in Raleigh average around $1,550/month. That's a $2,400 annual gap in favor of Raleigh — narrower than the buyer gap, but consistent in direction.
| Austin | Raleigh | |
|---|---|---|
| Annual rent (2BR) | $21,000 | $18,600 |
| State income tax | $0 | $4,218 |
| Net annual position | Austin: +$1,818 | — |
For renters, Austin's income tax advantage wins — but only by about $1,818 per year. That margin is thin enough to be erased by a single variable: a slightly nicer unit in Raleigh, a longer commute in Austin, or childcare cost differences that don't show up in this comparison.
The renters-vs.-buyers divergence is one of the most underappreciated dynamics in any Sunbelt comparison. We mapped a similar split in the Austin vs. Charlotte post-pandemic housing analysis — the pattern is consistent: Texas's no-income-tax edge is a renter's advantage, not a buyer's.
The Purchasing Power Reality Check
Raw salary and tax numbers only tell part of the story. The BLS Regional Price Parity (RPP) index measures how far a dollar actually goes in each metro across all goods and services — not just housing.
Austin's RPP has risen substantially since 2020. The metro now sits at approximately 107 on the BLS scale (where 100 equals the national average), meaning prices are roughly 7% above the national norm. Raleigh's RPP is closer to 102.
That 5-point difference compounds on everything from groceries to healthcare to childcare:
- $110K in Austin delivers real purchasing power equivalent to roughly $102,800 in a median-cost market
- $110K in Raleigh, after NC income tax, produces a net salary of ~$105,782 with real purchasing power of roughly $103,708 in a median-cost market
The gap is not enormous in isolation — but Austin's RPP premium has continued rising while Raleigh remains closer to the national baseline. Realtor.com's mid-2026 reporting on rising homeownership costs underscores this: supply chain pressures and material cost increases are hitting Sunbelt metros especially hard, where post-pandemic ownership rates surged and deferred maintenance is now coming due. These aren't captured in headline cost-of-living comparisons, but they show up in your actual budget.
You can model your own salary and spending profile — adjusted for your actual neighborhood and housing budget — at Vontari rather than relying on metro-wide RPP averages.
The Estate Planning Angle You Probably Haven't Considered
Here's one that almost no relocation calculator includes: Texas is a community property state. North Carolina is not.
If you're married, that distinction has real financial consequences for asset ownership, estate transfers, and what happens to jointly acquired property in the event of death or divorce. Under community property rules, assets accumulated during a marriage are generally owned 50/50 by both spouses — which creates specific implications for inheritance and stepped-up cost basis treatment on appreciated assets.
SmartAsset's review of state of residence for tax and estate planning purposes notes that community property can produce favorable tax outcomes through basis step-up rules, but the full picture is complex and depends on your specific asset mix and estate structure.
For most people on $110K this isn't the primary decision driver — but for anyone with significant investment assets, a home they're selling, or a family with inheritance concerns, the domicile choice extends well beyond your W-2. We explored similar hidden-layer tax implications in the NYC vs. Austin second-home tax trap analysis, where domicile decisions created tax exposure that no headline comparison captured.
The Sunbelt Affordability Shift in 2026
The broader context for this comparison: the Sunbelt affordability narrative is under real structural pressure.
Austin was the most extreme post-pandemic price acceleration story in the country — home prices rose over 60% from 2020 to 2022, corrected, and then stabilized at levels still roughly 45% above 2019. The no-income-tax advantage that once made Texas an obvious financial win for California migrants was built on a housing market where a $350,000 home in Austin and a $300,000 home in Raleigh were a reasonable comparison. That market is gone.
Raleigh followed a similar trajectory but with two meaningful structural differences: home prices remain approximately $80,000–$100,000 lower than comparable Austin properties, and North Carolina's income tax rate has been shrinking every year — narrowing the gap with Texas annually, with the scheduled drop to 3.99% in 2027 continuing the trend.
Realtor.com's analysis of traditional homebuying rules — including the long-held wisdom that buying beats renting after five years — notes that high mortgage rates, slower appreciation, and rising ownership costs are forcing buyers to extend their break-even timelines to 7-10 years in many markets. In Austin, where property taxes add $11,000+ to your annual fixed costs, that timeline gets pushed out even further.
For how the Raleigh tax picture has evolved alongside Florida competition, see the Raleigh vs. Tampa affordability comparison, which models NC's rate cuts against Florida's no-income-tax edge — the same dynamic at work from the opposite direction.
The Annual Summary
| Financial Factor | Austin Advantage | Raleigh Advantage |
|---|---|---|
| State income tax | +$4,218 | — |
| Sales tax (est. $30K spending) | — | +$300 |
| Annual housing cost (buyer) | — | +$15,249 |
| Annual housing cost (renter) | — | +$2,400 |
| RPP purchasing power (est.) | — | +~$5,000 |
| Net annual gap — buyers | — | +$11,331 |
| Net annual gap — renters | +$1,818 | — |
The Bottom Line
Austin's income tax advantage is real and should be in your model. But for a homebuyer on $110K at 2026 prices and mortgage rates, it doesn't survive contact with Texas's property tax bill. Raleigh wins total annual cost by over $11,000 — even after crediting Austin's full income tax edge.
For renters, Austin holds a narrow annual advantage of roughly $1,800 — a real number, but a thin margin for a major life decision.
And for anyone thinking long-term: North Carolina's income tax is declining every year. Austin's property values and property tax bills are unlikely to return to their pre-2020 baseline. The direction of each city's financial trajectory matters as much as today's snapshot.
Before you make the call, run your specific numbers — your actual housing budget, your family size, your commute trade-offs, your timeline. The scenario above uses median market data; your situation may shift the answer by $5,000–$10,000 in either direction.
Vontari models your real salary, housing budget, family situation, and full tax burden for both cities — so the comparison you're looking at is yours, not a composite of someone else's move.
Sources
- State Rundown 6/25: Trending This Summer? New Revenue! — Institute on Taxation and Economic Policy
- State of Residence for Tax Purposes and Estate Planning — SmartAsset
- Homeowners Preparing for Summer Will Be Hit With Another Price Increase on July 1—and It’s Not for Gas — Realtor.com News
- 135-Year-Old Virginia Lighthouse That Has Been Turned Into the Ultimate Off-Grid Haven Hits the Market for $995K — Realtor.com News
- The Rules That Once Helped Americans Buy Homes Now Risk Leaving Them in the Red — Realtor.com News