The largest tax cut in Texas history property tax bill, according to the Texas House, is a $17.3 billion plan to reduce property taxes.
The homestead exemption for older Texans is increased to $100,000 (Photo: Investopedia)
The Property Tax Bill: Supported by Texas House
The goal of the property tax bill, according to state Rep. Morgan Meyer, R-Dallas, is to lower assessed value ceilings for real property, extend assessed value caps to all authentic property, compress school district dues, and create an escrow feature. All property kinds are subject to a 5% yearly appraisal cap under House Bill 2. Reducing the tax rate by 25 cents by 2025 also reduces school district property tax bill, which makes up the majority of a homeowner’s tax payment.
At the Texas A&M Real Estate Centre, Texans who own property for $350,000 will save $542 in 2024 and $733 in 2025 thanks to this legislation. Furthermore, the measure states that the benefit increases with the length of time a homeowner stays in the residence. It obtained 139/5. After the vote, House Speaker Dade Phelan tweeted, “Proud of the TX House today for supporting.” Looking forwards to collaborating with the Texas Senate on these proposals to implement the greatest reduction in property tax bill in state history. However, not all supported the bill.
Gene Wu, a state representative from Houston, said he voted against the measure because he thought it unjustly favored wealthy households with more expensive properties while providing little to no benefit to homes with lower evaluated values. He continued by saying that while the cap only applies to existing ownership, he also believes that the policy actively inhibits individuals from purchasing new properties. “People would be penalized for upgrading or moving to a larger home to accommodate a growing family, and first-time homebuyers and young families who need this security the most would not receive it,” Wu added.
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Tax Exemption Versus Appraisal Cap
Both chambers and state officials have declared that lowering growing property taxes is a high priority for this session, but they have different ideas on how to proceed. Senators favour homestead exemptions while members of the House favour appraisal caps. Appraisal caps, according to those who are opposed to them, only offer respite in times of market boom, such as the one the state is currently going through. However, property owners won’t see any relief if an appraisal value doesn’t increase by more than 5% year or even drops.
Most Texans favour tax exemptions over appraisal caps, according to a survey conducted by Baselice & Associates, a national research firm According to pollster Mike Baselice, “there was serious hesitation and concern over how appraisal caps in California led to a huge housing shortage, the greatest wealth gap, and huge inequities with rightful owners of similarly valued properties paying drastically different property taxes.” Sen. Dan Patrick, the lieutenant governor, has argued that appraisal caps don’t work, and Texas senators, who enacted their own property tax bill plan last month, have declared their extreme opposition to them.
“We concentrated on assessment caps 20 years ago when I first joined the Senate. We had to come up with a different strategy because, as a senator, I discovered that appraisal caps didn’t work,” Patrick added. Instead, the senate version includes homestead exemptions, reduced school tax rates, and business-focused property tax bill, and delivers $16.5 billion in relief spread across three bills. The exemption plan increases the previous $40,000 school district homestead exemption for the 5.72 million Texas houses to $70,000 under the new plan.
