What Is the New Texas Property Tax Relief Bill?

Hello from Hegwood Group! We understand that changes to property tax law can be daunting, so let’s take a look at the new Texas Property Tax Relief Bill and how it might affect you.

What is the Texas Property Tax Relief Bill?

The Texas Property Tax Relief Bill is a significant piece of legislation resulting from a state constitutional amendment (Proposition 4) overwhelmingly approved by voters.  This bill is aimed at providing substantial tax relief for Texas homeowners and businesses. Let’s break down the key benefits:

Increased Homestead Exemption

One of the biggest changes is a dramatic increase in the homestead exemption. This exemption protects a portion of your home’s value from the property tax meant for public schools. The new bill more than doubles the exemption, from $40,000 to $100,000.

Lower School District Taxes

School districts receive billions of dollars in additional state funding to make up for lost local revenue. This translates into lower tax rates for you, the taxpayer.

Tax Savings

The combined effect of these changes means significant savings. A typical Texas homeowner could save over $2,500 in property tax over the next two years, with even greater savings for seniors.

Was Proposition 4 Necessary?

There are a few major reasons voters were so enthusiastic.

The Texas Paradox

Texas has built a reputation as a haven for those seeking a low-tax environment. This reputation stems primarily from the lack of a state income tax. However, this image can be deceiving. While Texans avoid income tax, they carry one of the heaviest property tax burdens in the entire United States.

Rapidly Rising Appraisals

Texas property values have skyrocketed in recent years, fueled by population growth and a booming real estate market. While great for homeowners in terms of equity, this surge in values directly translates to higher property tax bills. Property taxes are based on appraised values, so when your home’s value goes up, so does your tax bill.

Strained Budgets

The burden of these escalating property taxes has created financial strain for families, businesses, and especially seniors on fixed incomes. Many Texans were feeling squeezed as property taxes ate up larger portions of their budgets.

A Matter of Fairness

There was a growing sense of inequity in the system. Residents felt their property taxes were rising far faster than their income or the services they received. Taxpayers were paying more, but not necessarily receiving more value.

Political Momentum for Change

This feeling of imbalance created a strong demand for property tax reform across the state. Proposition 4 wasn’t just about easing the burden; it was about delivering a sense of fairness and making Texas a more affordable place to live and do business.

The central goal of the Texas Property Tax Relief Bill is to address these issues by directly lowering property taxes, making them more predictable, and offering protections against future surges. The increased homestead exemption and the additional funding for school districts are aimed at providing immediate and tangible relief to property owners across the state.

Other Provisions

The bill includes additional tax relief components that will change the lives of property owners, business or otherwise:

Growth Cap

A new cap limits how much your property value can increase each year for tax purposes. This applies to all kinds of real property.

Franchise Tax Changes

Expands the types of businesses exempt from the state franchise tax.

Appraisal Board Elections

Voters in larger counties can now elect some members of their appraisal district’s board of directors.

CTA Hegwood Group

The Texas Property Tax Relief Bill is a substantial step in lowering your “property tax” burden.  The increased homestead exemption and lowered school district tax rates are particularly impactful for homeowners.

At Hegwood Group, we’re committed to helping clients navigate the complexities of property tax law. For a personalized assessment of how this bill impacts your property, contact us for a consultation. We can estimate your potential savings and discuss potential strategies to maximize your benefits.