Property Tax Relief in Texas
AUSTIN – Property tax relief is a priority for Republican state leaders, who have worked alongside Democrats in the Texas Capitol for years to reduce those taxes for Texas homeowners – but changes require voters’ approval. Texas voters approved Proposition 13, which would raise the homestead exemption from $100,000 to $140,000. According to unofficial voting returns, the amendment passed with 79% of the vote with 100% of the state’s voting precincts reporting early Wednesday.
Here’s what to know about the proposed exemption. Texas homeowners pay school district taxes based on the market value of their property, which has been increasing dramatically in recent years. The homestead exemption reduces the value of the property by removing a certain amount of money off the top before it can be taxed — reducing the amount a homeowner would pay each year.
What is the Homestead Exemption?
The homestead exemption is a tax exemption that reduces the value of a property by a certain amount, resulting in lower property taxes for homeowners. In Texas, the homestead exemption is available to homeowners who live in the homes they own, and it can be claimed on their primary residence.
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How Much Will the Exemption Be If the Amendment is Approved?
Starting with the 2025 tax bill, homeowners under the age of 65 would be able to remove $140,000 from their property value if the proposition passes. Texans who live in the homes they own — the definition of a “homestead” — should make sure they have applied and received the proper status through their county tax office in order to qualify for the exemption.
Texans ages 65 and older get an additional $60,000, raising their exemption to $200,000.
How Much Would Homeowners Save on Average?
Along with business property cuts, the tax relief would cost the state nearly $10 billion in general revenue and save the average homeowner under 65 $484 on their property taxes this year, according to bill authors. For seniors, the average value of their homes is $200,000 — the amount of their homestead exemption — which means most seniors would not have to pay school property taxes at all.
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Why Are We Voting on This?
The homestead exemption, like most major tax policy, is housed in the Texas Constitution — which can only be changed if two-thirds of the Texas Legislature votes for an amendment and then voters approve it. This is so that lawmakers can’t change tax rates up or down unless voters want them to — which helps maintain financial stability for residents and the state.
Sounds Great. Is There a Downside?
Property taxes pay for public schools, which don’t collect taxes on their own, so many education supporters fear that the tax cuts would be made with no solid plans to replace that funding — so the idea has its detractors in the state Legislature. But the cuts passed overwhelmingly, as voters have told lawmakers on both sides of the aisle that property tax relief is critical and few lawmakers can politically afford to vote against it.
Do Voters Typically Approve Tax Cuts?
Yes, overwhelmingly. In 2023, voters approved raising the school district tax exemption from $40,000 to $100,000 after a hard-fought battle by lawmakers to enact an $18 billion property tax package that included some $12.7 billion in new cuts. That was estimated to have saved Texas homeowners an average of $700 on their bills.
Conclusion
In conclusion, the proposed exemption is a significant step towards providing property tax relief to Texas homeowners. With the exemption increasing from $100,000 to $140,000, homeowners under the age of 65 can expect to save an average of $484 on their property taxes. For seniors, the exemption increase to $200,000 means that most will not have to pay school property taxes at all. While there are concerns about the potential impact on public school funding, the overwhelming approval of the proposition by voters demonstrates the importance of property tax relief in Texas.
Frequently Asked Questions
Q: What is the homestead exemption?
A: The homestead exemption is a tax exemption that reduces the value of a property by a certain amount, resulting in lower property taxes for homeowners.
Q: How much will the exemption be if the amendment is approved?
A: Starting with the 2025 tax bill, homeowners under the age of 65 would be able to remove $140,000 from their property value if the proposition passes. Texans ages 65 and older get an additional $60,000, raising their exemption to $200,000.
Q: How much would homeowners save on average?
A: Along with business property cuts, the tax relief would cost the state nearly $10 billion in general revenue and save the average homeowner under 65 $484 on their property taxes this year.
Q: Why are we voting on this?
A: The homestead exemption, like most major tax policy, is housed in the Texas Constitution — which can only be changed if two-thirds of the Texas Legislature votes for an amendment and then voters approve it.
