Cost of Living: California vs. Texas
Prices, housing, income tax, sales tax and property tax compared, using federal price data and Census figures.
Overall prices in California are about 14% higher than in Texas, according to the federal Bureau of Economic Analysis (2024: California 110.7, Texas 97.1, U.S. average 100). Almost all of the gap is housing: the median home is worth $734,700 in California and $283,800 in Texas. Texas has no income tax, but higher property tax rates; California has higher sales tax.
Prices: the BEA comparison
Regional price parities (RPPs) measure how a state's price level compares with the national average. California had the highest RPP of any state in 2024.
| Category (2024, U.S. = 100) | California | Texas | California higher by |
|---|---|---|---|
| All items | 110.7 | 97.1 | 14% |
| Housing rents | 154.3 | 96.5 | 60% |
| Utilities | 158.9 | 87.5 | 82% |
| Goods | 106.1 | 98.1 | 8% |
| Other services | 102.6 | 97.1 | 6% |
Groceries, clothing and most other goods cost only a little more in California. Rents and utilities are where the states diverge. These are statewide averages; San Francisco, Los Angeles and San Diego are well above California's figure, and much of the Central Valley is below it.
Housing
| Census, 2020-2024 | California | Texas |
|---|---|---|
| Median home value | $734,700 | $283,800 |
| Median monthly owner costs, with a mortgage | $2,946 | $2,106 |
| Median gross rent | $2,036 | $1,403 |
| Median household income | $99,122 | $78,476 |
The median California home is worth $450,900 more, but monthly owner costs differ by much less, because many California owners bought years ago and Prop 13 holds down their property tax. A buyer today pays today's prices; see how much house you can afford in California.
Income tax
Texas doesn't levy a personal income tax. California does, at 1% to 12.3% plus 1% over $1 million of taxable income, and employees also pay 1.3% for State Disability Insurance on all wages. Estimated California income tax for a single filer with wages only (tax year 2025, standard deduction):
| Wages | California income tax | SDI | Texas |
|---|---|---|---|
| $60,000 | $1,640 | $780 | $0 |
| $100,000 | $5,055 | $1,300 | $0 |
| $200,000 | $14,355 | $2,600 | $0 |
Federal income tax is the same in both states. California doesn't tax Social Security, which matters less for the comparison since Texas doesn't tax any income. If you move, California can still tax income you earned while a resident; see moving out of California: taxes.
Sales tax
California's statewide rate is 7.25%, and local add-ons push combined rates as high as 11.75% in the cities we track. Texas charges 6.25% statewide, and local governments can add up to 2%, for a maximum of 8.25%. Unlike California, Texas also taxes some services.
Property tax
Texas has no state property tax; cities, counties and school districts set their own rates, and without an income tax, Texas relies on sales and property taxes for revenue. The Texas Comptroller notes that the Tax Foundation ranked Texas sixth-highest in the nation for effective property tax rates. California's base rate is 1% of assessed value plus voter-approved debt, and Prop 13 limits increases in assessed value to 2% a year until the home is sold, so long-time owners pay far less than the market value suggests. See how Prop 13 works.
What it adds up to
- Renters and new buyers feel the full housing gap: California rents are about 45% higher by the Census medians.
- High earners gain the most from Texas's lack of income tax.
- Long-time California homeowners often have low property tax bills that a Texas home of the same value wouldn't match.
- Pay is higher in California on average, which offsets part of the difference.
Run your own numbers
The CA Paycheck Calculator shows California take-home pay after federal and state withholding and SDI; compare it with your federal-only take-home in Texas. For housing, try the home affordability calculator.
Frequently Asked Questions
How much more expensive is California than Texas?
About 14% overall. The BEA's 2024 regional price parities put California at 110.7 and Texas at 97.1, where the U.S. average is 100. Housing rents are the biggest gap: 154.3 vs. 96.5.
Does Texas have a state income tax?
No. Texas doesn't levy a personal income tax. California's rates run from 1% to 12.3%, plus 1% on taxable income over $1 million, and employees also pay 1.3% SDI.
Is property tax higher in Texas than California?
Usually, as a rate. Texas has no state property tax, but its local property tax rates are among the highest in the country. California's rate is capped at about 1% of assessed value plus voter-approved debt under Prop 13. Because California homes cost far more, the dollar bills can still be similar.
Is sales tax higher in California or Texas?
California's. Its statewide rate is 7.25% and combined rates reach 11.75% in the cities we track; Texas is 6.25% statewide with a maximum combined rate of 8.25%.
Do people earn more in California?
Yes, on average. Median household income was $99,122 in California and $78,476 in Texas (2020-2024 American Community Survey), but the gap is smaller than the gap in housing costs.
This article is for general information only and is not financial or tax advice. Statewide figures hide big differences between cities in both states. Sources: U.S. Bureau of Economic Analysis, Regional Price Parities by State, 2024 (release BEA 26-10, Feb. 19, 2026); U.S. Census Bureau QuickFacts (American Community Survey 2020-2024); FTB 2025 Tax Rate Schedules; CDTFA sales tax rates; Texas Comptroller of Public Accounts sales tax and property tax pages and Fiscal Notes (Dec. 2023).