Lone Star homeowners may remember receiving a serious property tax deduction just two years ago. Well, more relief is ongoing thanks to the Texas Property Tax Bill, which hit the vote this fall.
The proposed legislative package includes an increase in Homestead exemptions, as well as corporate fixed asset tax cuts. If approved by voters in November, homeowners and business owners will receive a $51 billion tax relief fund.
“The Texas Legislature never allocated more funds to provide property tax relief than this session,” Texas Gov. Greg Abbott said in a press release. “I urge Texans to approve the new increase.”
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But not all Texas are on the monetary bailout and will be immersed in budget surplus despite the future uncertainty surrounding federal funds. Additionally, the region was able to draft bills for the proposed tax cuts.
Below is a breakdown of Texas Property Tax relief bills and how much you can save.
Texas Property Tax Relief for Homeowners
Some of the proposed tax credits in Texas include reductions in the property tax bill.
This is a big deal, as the exemption amount more than doubled from $40,000 to $100,000 just two years ago. The newly proposed Texas Homestead Waiver (Senate Bill 4) could increase the amount to an additional $140,000.
Lt. Colonel Texas, a leading advocate for property tax relief, said homeowners under the age of 65 can see school taxes being cut “nearly 50%.” When you raise the exemption, the taxable value of the property that is exempt from property tax is $40,000.
But that’s not all. Homeowners and people with disabilities over the age of 65 can save more under the new bill.
Texas Senior Homestead Exemption
The state will not only acquire tabs for homeowners under the age of 65, but will also earn additional benefits for those aging if the new property tax bill is approved.
The current Homestead exemption for people over the age of 65 or with disabilities is $110,000. This is an increase from $50,000 just two years ago. On Senate Bill 23, the exemption jumps to $160,000.
On average, the Texas Senate estimates that seniors or disabled homeowners can see an annual savings of $454.30.
Combined with the first Homestead exemption and the school’s tax rate “compression” (more details below), homeowners over the age of 65 can receive a property tax savings of $938.72 each year.
Texas Business Tax Exemption
Texas businesses may see huge tax cuts under the new property tax bill through increased exemptions (Hospital Bill 9).
Currently, Texas law allows businesses to exempt taxes from property that generates up to $2,500 in revenue. This may include equipment such as computers, printers, and specialized vehicles.
The new law will increase the current exemption to $125,000, dramatically reducing the amount of property taxes companies pay on personal business assets.
The initiative is expected to save business owners an average of $2,499 a year, according to a post by Sen. Paul Bettencourt (R-Houston), author and advocate of Texas Property Tax Relief.
Texas tax cuts: Regions can bear the brunt
Of course, all tax credit bills cost money. Texas’ fixed asset tax cuts will use “compression” to compensate for losses in revenue.
This means that the state will provide more funding to school districts and schools can cut taxes for homeowners. However, it is the responsibility of the local government to miss out on income at the county or city level.
“If there’s a pay raise (fees) to get back some of this lost money, it’s going to make us look like the bad guys,” McLennan County Commissioner Jim Smith told a local news outlet. He specifically mentioned business tax exemptions.
Others have raised concerns about rising state-level spending amid uncertainty in federal budgets. As GOP’s “big and beautiful bills” progress through Congress, the Federal Reserve Bank of Dallas reports on Texas’ healthy but slower economy. Customs policies combined with federal spending cuts can complicate future budget plans for the lonely Seongju.
Despite these pushbacks, the bill is headed to Governor Abbott’s desk and could be approved for votes in November. stay tuned.
