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Texas Property Tax Relief: House, Senate Bills Differ on Property Tax Credits

Texas Property Tax Relief
This is an aerial representation photo showing several houses as both House and Senate made two different versions of Texas Property Tax Relief. (Photo by Breno Assis on Unsplash)

To relieve homeowners, the House and Senate have proposed bills to offer Texas Property Tax Relief. However, the two chambers have taken different approaches to this issue, causing debate among legislators and residents regarding property tax credits.

The House bill proposes an increase in the homestead exemption, which would provide more than $17 billion in property tax relief across the state. On the other hand, the Senate has proposed a tax credit that would raise the entire homestead exemption for school district taxes by 75%, from $40,000 to $70,000.

While both proposals aim to provide Texas property tax relief to homeowners, they have sparked controversy.

Texas Property Tax Relief

This is a representation photo showing home keys as House and Senate made two separate bills on Texas Property Tax Relief. (Photo by Maria Ziegler on Unsplash)

Texas Property Tax Relief: House, Senate Bills Differ on Tax Credits

A new Texas property tax relief was unveiled by members of each chamber on Thursday last week, which they claimed would help Texas property owners. 

Dallas Republican state representative Morgan Meyer introduced House Bill 2, which seeks to lower tax rates for school districts. 

The maximum compressed school tax rate would be decreased by 15 cents, but not by less than 90% of the leading tight tax rate, lowering school district property taxes by 28% if the measure were to pass. 

According to House Speaker Dade Phelan, this strategy will save the owner of a $350,000 house $460 in school district taxes this year and $590 in 2025. 

Phelan’s major Texas property tax relief plan revealed Thursday, asks for $17 billion in cutbacks. A stiffer restriction on how much school district rates may go up each year, establishing a clear difference between the Texas Legislature’s two chambers on how to deliver tax relief to property owners this session. 

Texas Standard said the most controversial aspect of Phelan’s proposal, though, is a plan to extend the benefit, which presently exclusively affects homeowners, to commercial property owners and to tighten the ceiling on how much more school districts may tax property owners each year. 

ALSO READ: New Homeowners Tax Credit: See How You Can Get Your Money Back

The homestead exemption for school district taxes would rise from $40,000 to $70,000 under Senate Bill 2, which state senator Paul Bettencourt, a Republican from Houston, introduced. This is a 75% increase overall. 

According to authorities, this adjustment would save the typical homeowner $341 in school taxes each year. The measure has the co-authorship of each Texas senator. 

Should either measure or a combination of the two succeed, it would go before voters in November. 

Property Tax, School Finance Interwoven

Gainesville Daily Register said that property taxes and school finance are interwoven. Hence, there is a debate regarding Texas property tax relief.

The majority of property taxes are paid to school districts. Nowadays, local communities get around 46% of their total budget through taxes. 

Property tax reform usually doesn’t bother the members of the Texas Association of School Boards, according to Dax Gonzalez, as long as the state agrees to make up the difference. 

Gonzalez forewarned that the 2009 Assembly passed an education budget that was substantially balanced with federal stimulus funds after the recession. Since there was no government stimulus package for the next session, the school budget was slashed by $5.4 billion. 

He said that since sustainable financing was not established in that case, a short-term decision on the education budget resulted in a significant decrease, which he thinks might happen again.

RELATED ARTICLE: Inflation Reduction Act: Washington Provides Tax Credits Of Up To $8,000 For Installing Heat Pump

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