During the 2020-2022 pandemic tech boom, Austin, Texas became the poster child for the "Great Tech Migration." Drawn by the promise of zero state income tax, cheaper McMansions, and a thriving live music scene, thousands of software engineers fled the Bay Area for the "Silicon Hills." Major players like Oracle, Tesla, and Zoho moved their official headquarters to the region.
But fast forward to today, and the financial reality of Austin has shifted dramatically. While it remains a premier tech hub, the infamous "Texas Discount" is no longer the guarantee it once was.
The Income Tax Illusion
The primary draw to Texas is the lack of a State Income Tax. In California, high earners are subject to the notoriously steep Franchise Tax Board (FTB) rates, which scale up to 13.3% (and now 14.4% for earners over $1M). Escaping this bracket instantly boosts your take-home pay by thousands of dollars a month.
However, Texas funds its state government differently—primarily through Property Taxes. According to SmartAsset, Texas has the 6th highest property tax rate in the country, averaging around 1.80% (and often over 2.2% in Austin suburbs like Round Rock or Cedar Park). California, shielded by Proposition 13, averages around 0.73%.
If you buy a $1,000,000 home in Austin, you could pay $20,000 to $25,000 annually just in property taxes—an expense that never goes away, even after the mortgage is paid off. This severely cuts into the income tax savings.
Salary Adjustments: Run the Live Numbers
Tech companies are acutely aware of the lower cost of living in Texas. Most Tier 1 tech companies (like Google, Meta, and Apple) adjust base salaries downward by 10% to 15% for employees based in Austin compared to San Francisco. Check the true purchasing power equivalence below:
Housing: Is Austin Still Cheap?
Before 2020, you could easily buy a large, new-build home in Austin for under $400,000. Following the tech influx, the median home price skyrocketed, peaking near $600,000 before cooling off. Renting a 1-bedroom apartment downtown now costs $1,800 to $2,300.
While this is undeniably cheaper than San Francisco (where median homes are still $1.3M+ and rents are $3,000+), Austin is no longer a "cheap" city. When combined with the high property taxes and the necessity of car ownership (and mandatory A/C bills during 105°F summers), the localized inflation is very real.