Texas vs. Arizona: is leaving Phoenix or Tucson for Texas actually cheaper?

Side by side

We used the same source on both sides wherever we could: Apartment List for rent, Zillow for home values, AAA for gas (the EIA doesn’t publish a weekly Arizona price), Experian for car insurance and BEA for overall prices. Houston and San Antonio home prices are the exception, noted below.

Zillow’s home value index is a typical value for all homes in the city, not a sale price. We couldn’t open Zillow’s Houston or current San Antonio pages, so those rows use the local Realtor associations’ sale-price medians instead; don’t compare them directly to the Zillow figures. The Tucson Zillow figure comes from a Tucson page that Zillow says shows data for the surrounding area. Gas prices change daily, and the two AAA figures were read a day apart. The regional summer bill row covers groups of states, not Phoenix alone. BEA’s next price-parity release, with 2025 data, is due Dec 10, 2026.

Arizona income tax, in plain terms

Arizona has one rate: 2.5% of taxable income, which the Department of Revenue’s 2026 estimated-tax booklet uses for tax year 2026. Taxable income starts from your federal adjusted gross income, less the Arizona standard deduction (or itemized deductions). For 2025 the single standard deduction is $15,750, the same as the federal amount for 2025.

• No local income tax. Phoenix and Tucson don’t add one.
• No state disability or paid-leave payroll deduction. Unlike California or Colorado, Arizona doesn’t withhold one from wages.
• 2026 deduction amounts aren’t posted yet. ADOR’s 2026 estimate worksheet says to use your 2025 standard deduction. The state statute adjusts it each year the same way the federal deduction is adjusted, so the 2026 figure should be a little higher.
• Federal conformity was a fight this year. Arizona didn’t settle which 2025 federal tax changes it would adopt until HB 4168, signed June 13, 2026, which set the $15,750 standard deduction retroactive to 2025.

Texas has no state income tax. Federal income tax, Social Security and Medicare are the same in both states.

Worked example: $90,000 and $150,000 in Phoenix vs. Dallas

This counts only state and local income tax, for a single filer with wages only. Our assumptions:

• Single filer, under 65, no dependents, all income from wages, full-year Arizona resident.
• Arizona standard deduction of $15,750, the 2025 amount, which ADOR tells 2026 estimate payers to use. No other deductions, subtractions or credits.
• Tax at the flat 2.5%. Arizona’s optional tax tables can differ from this by a few dollars.
• Neither Phoenix nor Dallas has a local income tax. Federal tax, sales tax and property tax are left out.

The income tax result is the same in Tucson, and the same against Austin, Houston or San Antonio, since none of them has a local income tax.

Then add rent, which can go the other way

Phoenix is cheaper to rent than Dallas or Austin. The median 1-bedroom is $1,071 in Phoenix and $1,207 in Dallas, so a renter moving to Dallas pays about $136 a month more, or $1,632 a year. For the $90,000 earner, that wipes out most of the $1,856 income tax savings. Houston ($1,116) is close to Phoenix, and San Antonio ($953) is cheaper. Coming from Tucson, where the median 1-bedroom is $869, every big Texas city costs more to rent.

And then subtract property tax, if you buy

This is where Arizona wins. Using the Tax Foundation’s statewide effective rates, a $400,000 home (close to Phoenix’s typical value) works out to about $1,920 a year at Arizona’s 0.48% and about $5,600 at Texas’s 1.40%. That $3,680 gap is bigger than the income tax our $150,000 earner saves. It’s an illustration, not a bill: Texas bills depend on the city, the school district and your homestead exemption. See Texas property taxes for local rates.

Why Texas property tax hits Arizonans so hard

Arizona funds more of its government through sales tax, and it shows: the average combined sales tax is 8.52%, the 11th highest in the country, while property taxes on homes are among the lowest. In Maricopa County, the Tax Foundation puts the median home value at $452,800 and the median tax paid at $1,983, an effective rate of 0.44%. Pima County is higher, at 0.70%.

Texas works the other way. There is no state property tax, but cities, counties, school districts and special districts each levy their own, and with no income tax they lean on it. Some things soften the bill:

• The school-tax homestead exemption is now $140,000, and filing is free.
• A homestead’s taxable value can rise no more than 10% a year.
• Typical homes in Dallas, Houston and San Antonio cost less than in Phoenix (see the table above), so the rate falls on a smaller number.

Several Texas rates are on the Nov 3, 2026 ballot: a Dallas County tax rate election and school tax increases in two San Antonio districts. See Texas property taxes for the details.

Summer: Phoenix heat vs. Texas heat

Both places run the AC for months, but the bills look different.

Phoenix is hotter; Texas is muggier and uses more power

The summer of 2026 was the second-hottest on record for Phoenix and the hottest on record for Arizona as a whole, according to National Weather Service data compiled by KJZZ. Even so, the EIA estimates that homes in the Mountain states used about 1,193 kWh a month in June through August 2026, against 1,478 kWh in the West South Central states that include Texas. At similar prices per kWh, that puts the average summer bill at about $179 a month in the Mountain region and $226 in Texas’s region. Those are regional averages, not Phoenix or Dallas bills.

How you buy power changes

In Phoenix, your utility is set by your address (mostly APS or SRP). In Dallas and Houston, you pick a retail electricity plan, and the plan you choose matters a lot. Austin and San Antonio have city-owned utilities. See Texas electricity and Texas summer costs.

Price per kWh is close

Arizona’s residential average was 15.1¢/kWh in August 2026, against 15.9¢ in Texas. SRP cut its rates 3% from May through October 2026, worth about $5.50 a month to the average home, so Phoenix summer bills from 2026 run a little below normal.

What surprises people coming from Arizona

Gas is about 80 cents cheaper

AAA had Arizona at $4.45 a gallon and Texas at $3.66 at the end of October 2026. At 12,000 miles a year and 25 mpg, that’s about $380 a year.

Car insurance costs more, not less

Experian’s September 2026 averages are $1,927 in Arizona and $2,329 in Texas, about $400 a year more. Houston is the priciest of the big Texas cities at $2,696. Registration and the new-resident fee are on our vehicle costs page.

Overall prices are similar

BEA puts Phoenix at 103.3 and Dallas-Fort Worth at 103.1, essentially tied. Houston, Austin and San Antonio are cheaper than Phoenix; Tucson (96.9) sits a little below Houston and Austin and above San Antonio.

Home insurance is a real line item

The Texas Department of Insurance puts the average Texas homeowners premium at $3,489 for 2025 (preliminary). Hail and wind drive it. Get quotes before you make an offer; see Texas insurance.

So who comes out ahead?

• Higher-earning renters moving to Houston or San Antonio: they keep the income tax savings and their rent is about the same or lower.
• Drivers with long commutes, thanks to cheaper gas, partly offset by higher car insurance.
• Homeowners usually don’t save. On a similar-priced house, Texas property tax at the statewide average runs thousands a year more than Arizona’s, more than a 2.5% income tax costs most households.
• Tucson renters will pay more for rent in any of the four big Texas cities.

Jobs and pay matter more than any of this. Compare offers with our Texas salary calculator.

Out-of-date numbers you’ll still find online

On Nov 3, 2026, Arizona voters decide Prop 316, which would cap local grocery sales taxes at 2% and require voter approval to raise them. The Tax Foundation’s state-local burden figures are still for calendar year 2022, even in its May 2026 Facts & Figures; they’re the latest available.

Where to go next

Pick a city: Austin, Dallas, Houston or San Antonio, or compare them all on the Texas city comparison. Then work through the moving checklist and Texas taxes. Weighing Colorado too? See Texas vs. Colorado, or Texas vs. California.

How we check

Every figure links to its source and shows the date it applies to. We prefer the agency that produces the number, such as the Arizona Department of Revenue, the Texas Comptroller, the EIA and BEA. We label anything from a marketplace or aggregator, such as the Experian, Zillow, AAA and ElectricRates.org figures here. Read the full methodology.