Moving From San Francisco to Austin: The Equity-Event Math That Changes Everything

Short answer: For a Bay Area household earning $1,000,000 a year, California's income tax runs about $90,000 annually at a top rate of 13.3%, which becomes zero in Texas and compounds into real money when invested. But the number that actually moves the needle for a tech family is the one-time one: California taxes capital gains as ordinary income, so a $5 million equity event (an IPO, an acquisition, a big RSU vest) costs roughly $660,000 in California state tax.

In Texas, that is zero. Time your move right and that single number can dwarf everything else. Here is the math. (This is general information, not tax advice. Please run your own numbers with your CPA.)

The Bay Area case is different, and it is about timing

If you are leaving San Francisco, the recurring income-tax savings are real and worth running, and I will run them. But the thing that makes the Bay Area different from almost anywhere else is equity. RSUs, ISOs, founder stock, a liquidity event on the horizon. California treats all of it as ordinary income and taxes it at up to 13.3%. Texas taxes none of it. So for a lot of tech families, the move is not really a salary decision. It is a decision about where you are a resident when your stock becomes cash.

Let me run both halves. Every figure matches our relocation calculator: select California, enter your income, married filing jointly, set the return to 6%, and add a capital gain to see the equity piece.

The recurring half: your income

A Bay Area household earning $1,000,000 a year pays California about $90,216 in state income tax, every year. In Texas, zero. Invest that annual saving at a conservative 6%, compounded, and it grows to:

-10 years: about $1,189,116

-20 years: about $3,318,642

-30 years: about $7,132,298

That is the same opportunity-cost engine we run for every move: the tax you stop paying is the deposit, and the compounding is the account. More than $3.3 million of additional wealth over twenty years, on a $1 million household, just from not handing it to Sacramento.

The half that actually decides it: the equity event

Here is where the Bay Area math gets its own chapter. Say you are sitting on a $5 million liquidity event, an IPO, an acquisition, a tender, or a few years of vesting stock you are about to sell. California taxes that gain as ordinary income, so at the top of the schedule it costs roughly $660,574 in state tax. Texas charges nothing on it.

That is a one-time number, but look at its size: $660,000 is more than seven years of the recurring income-tax savings, in a single event. And if you redeploy that avoided tax at a conservative 6%, it becomes about $2.1 million over twenty years. The catch, and it is the whole game, is residency and timing. You generally have to be a Texas resident, properly, *before* the sale for the gain to escape California, and California scrutinizes departures hard, especially around liquidity events. This is the single most important conversation to have with your CPA and a tax attorney before you sell, not after.

The honest counterweight: Texas property tax I net this out every time, because a number that ignores the downside is not honest. California property taxes are low (Prop 13 keeps them around 0.71% effective), and Texas is higher, around 1.8% in the Austin area. On a $1.5 million Austin home, that is roughly $327,000 more over twenty years than you would pay in California. Real money, and you should see it. But against $3.3 million in compounded income-tax savings and a potential $660,000 on an equity event, it is a fraction of the win. The calculator nets it out for you, and you can enter your own current rate for an exact comparison.

What your money buys, and the soft landing The Bay Area-to-Austin trade is also a quality-of-life arbitrage that buyers feel immediately. A budget that buys a good-but-ordinary home in Noe Valley or on the Peninsula buys a large, new, amenity-rich Austin estate with land and a pool. And Austin is the most natural soft landing for a Bay Area family: the same tech employers (Apple, Google, Tesla, Oracle, Meta all have a major Austin presence), the same food-and-outdoors culture, without the state taking 13.3% of everything.

Why I think about it this way Before real estate, I spent sixteen years in finance, a good chunk of it as a statistical arbitrage trader. Trading teaches you that idle capital has a cost and that timing a position is everything. Both apply here. The recurring savings need to compound, and the equity event needs to be timed around your residency. Most agents will show a Bay Area buyer a neighborhood. We will show you the spreadsheet: the recurring math, the equity math, and the property-tax offset, so you can make the call with your CPA on real numbers. We are asset managers, not lifestyle realtors.

A few honest caveats, because I would want them

-The equity-event savings depend entirely on residency and timing. Get this wrong and California can still tax the gain. Plan it with a CPA and a tax attorney well before any sale.

-The brackets are estimates, using 2025 marginal California rates plus the 1% surcharge over $1 million.

-6% is an assumption, not a promise. Use whatever rate you and your advisor believe in.

- None of this is tax advice.

Run your own version

Plug in your income, your expected equity event, your home budget, and your own property-tax rate, and the calculator recomputes the whole picture, recurring savings, the one-time tax avoided, and what it all compounds to over your horizon. It will not replace your CPA. It will tell you whether this is a conversation worth having, and when in your equity timeline it matters most. If it is, we would love to run your real numbers with you.

We are delighted to be your guides to Austin and Austin real estate, and always happy to nerd out on the numbers with you. Contact us for a personalized, complimentary analysis.

Cheers, Jen and the team

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Frequently asked questions

How much does a Bay Area household save in income tax by moving to Austin?

For a $1 million household, about $90,000 a year (California's top rate is 13.3%; Texas has no income tax). Invested at a conservative 6%, that compounds to roughly $1.19 million in ten years and $3.32 million in twenty.

What happens to my stock or IPO gains if I move to Texas?

California taxes capital gains as ordinary income at up to 13.3%, so a $5 million gain costs roughly $660,000 in California state tax. Texas taxes capital gains at zero. But you generally must establish Texas residency before the sale, and California scrutinizes departures, so plan the timing with a CPA and tax attorney before you sell.

Is it worth moving from San Francisco to Austin after Texas property taxes?

At high incomes, clearly. California property taxes are low (around 0.71% under Prop 13) and Texas is higher (around 1.8%), about $327,000 more over twenty years on a $1.5 million home. That is far outweighed by the income-tax savings, let alone a capital-gains event.

Why do so many Bay Area tech families choose Austin specifically?

Because the major tech employers (Apple, Google, Tesla, Oracle, Meta) all have a large Austin presence, the culture and outdoors feel familiar, your dollars buy far more house, and Texas takes none of your income or capital gains.

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*This article is general information, not tax, legal, or investment advice. Tax outcomes and investment returns depend on your specific situation and are not guaranteed; consult a qualified CPA and financial advisor. California rates per the Franchise Tax Board; figures use marginal brackets and are deliberately conservative. All scenario figures match the Berbas Group relocation calculator (California, $1,000,000 income, married filing jointly, 6% return; $5M one-time gain and $1.5M home for the respective lines).*

Full masterlist about relocation here.

*Jen Berbas is the team lead of the Berbas Group in Austin, Texas, and a contributor at Inman. A former statistical arbitrage trader, she brings an investment-minded, data-driven approach to helping high earners and tech families relocate and buy in Austin. [berbasgroup.com](https://www.berbasgroup.com/)*

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