Texas Property Tax Relief

Texas Property Tax Relief

Have you heard about the bill passed in the Texas House designed to lower property taxes? It’s about as clear as the Pedernales River after a torrential spring downpour. Let’s dig in anyway. 

This House Bill (HB2) proposed a $12 billion property tax relief and passed — almost unanimously— in the House. But hold on…the Senate also has their plan—and it actually did pass unanimously in the Senate. So, what does that mean? The good news is that both chambers feel very strongly about providing relief to Texans. The bad news, they’ll probably duke it out for a while. Until then, here is the skinny on both.  

House Property Tax Relief Plan

There are two main avenues of relief…

A $12 Billion Tax Relief Package

Anyone that pays property taxes knows that the majority goes to school districts. (Anyone that pays property taxes in Gillespie County and is aware of the Robin Hood Plan knows most of those dollars don’t stay in our County, but that’s another blog post.) The House proposes to use $12 billion from the state’s $33 billion surplus to give school districts, instead of getting these funds from property owners. That’s one way they plan to lower property taxes over 2024 and 2025. 

Cutting Appraisal Caps in Half

Historically, property appraisals could increase by as much as 10% every year. This new bill lowers that cap to 5%—a huge slash which would expand to include business properties such as restaurants and apartment complexes. That’s great for most property owners. However, anyone over 65 already has a freeze on their property taxes, so they miss out on that benefit. And there are some other arguments…. 

“Under the House’s proposal, owners of homes and businesses would get bigger tax breaks the longer they’ve held to their properties — and, as a consequence, more of the burden of paying property taxes would shift to new owners of homes and businesses. 

Critics also warn that halving the cap would drive up housing prices. Homeowners would be encouraged to hold on to their homes for a longer period in order to keep the tax benefit, resulting in fewer homes available for sale and higher home prices.

What’s more, critics say, cutting the appraisal cap wouldn’t meaningfully bring tax bills down because cities, counties and school districts could just raise their tax rates to make up for any lost revenue.”

(source: https://www.texastribune.org/2023/04/13/texas-house-property-taxes-appraisal-cap/) 

Senate Property Tax Relief Plan (SB3)

There is one main avenue of relief…

Raising Homestead Exemptions

The Senate’s proposal wants to raise the state’s homestead exemption from $40,000 to $70,000 — with an additional $20,000 to seniors as well as giving tax credits to businesses. (Homestead exemption is the amount of a home’s value that cannot be taxed by school districts.) 

No matter which side of the isle you sit, we can all agree that lower property taxes are welcomed. Meanwhile….we wait.

Whether you are considering selling or acquiring property, we would love to be your trusted real estate partner and advisor. At Fredericksburg Realty and Texas Ranch Realty, we stand by our word, our authenticity and treat each client like family. 

Visit us at fredericksburgrealty.com or call us at 830-997-6531.

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