Houston — the one major Texas metro still appreciating — sees owners use 1031/DSTs for passive, tax-deferred income.
The typical Houston home is worth about $265,000 (-0.4% over the past year, per Zillow's home value index). For owners of appreciated Houston investment property, a sale can trigger a large tax bill — which a 1031 exchange into a Delaware Statutory Trust can defer while moving you out of active management.
Houston market snapshot
Home value & YoY: Zillow Home Value Index, 2026. Cap-rate range approximate — verify for your asset and submarket.
The tax on a Houston sale
Texas has no state income tax, so a Houston sale is taxed only federally — 20% long-term capital gains plus the 3.8% net investment income tax, about 23.8% of the gain. A 1031 exchange into a DST defers all of it.
See the full Texas 1031 rules, tax math, and state-specific reporting →
Baker 1031 near Houston
Realized programs on Houston-area property. Sponsor-reported, net-to-investor, not independently verified; past performance ≠ future results.
| Program | Sponsor | Avg annual | Equity × | Hold |
|---|---|---|---|---|
| KinderCare / Children's World | AEI | 7.71% | 2.23x | 14.57 yr |
| Alexan Southside Place | Bluerock | -16.80% | 0.55x | 6.17 yr |
| Alexan City Centre | Bluerock | -6.47% | 0.78x | 7.58 yr |
| Villages at Cypress Creek | Bluerock | 24.64% | 1.87x | 5.08 yr |
| Veranda at Centerfield | Bluerock | 23.13% | 2.03x | 4.17 yr |
| Deerwood Apartments | Bluerock | 11.77% | 1.09x | 1.33 yr |
Houston FAQ
What's the typical home value in Houston?
The typical Houston home value is about $265,000 (-0.4% year-over-year, per Zillow's home value index, 2026). Owners of appreciated Houston rental or investment property often use a 1031 exchange into a DST to defer tax and move to passive ownership.
Do Houston sellers owe state tax on a gain?
No. Texas has no state income tax, so a Houston property sale is taxed only federally — up to 23.8% on the gain — which a 1031 exchange can defer.
Does a DST have to be located in Houston?
No. A DST doesn't have to hold Houston (or even Texas) property — you can exchange your Houston sale proceeds into vetted DST offerings anywhere in the country. We match the replacement to your goals, not your ZIP code.
Disclosures
This page is educational and is not investment, tax, or legal advice, or an offer to sell or a solicitation to buy any security. Home-value data is from Zillow's home value index (2026) and cap-rate ranges are approximate — verify current figures. State tax rules are summarized; confirm with your CPA and attorney. For accredited investors only. Representatives may transact business only in states where registered or exempt. Securities offered through Aurora Securities, Inc., member FINRA/SIPC; Baker 1031 Investments, LLC is independent of Aurora. Past performance does not guarantee future results.