What Taxes in 2025 Might Look Like
In the last several years the country as a whole has gone through a lot: political changes, natural disasters, pandemics, inflation, and more. These outside factors affect many parts of our life, including property taxes. In Texas specifically, major urban areas like Austin, Dallas, and Houston have seen substantial property value increases due to population growth and economic development, but also significant changes in property taxes due to inflation and natural disasters putting pressure on local budgets. Will this trend continue into 2025? Let’s find out.
A Look at Taxes in 2024
Just in the last month, property taxes in Harris County were raised by a record breaking 10% due to a plethora of natural disasters that allowed the county to exceed the typical 3% tax increase ceiling. That could increase to a whopping 15% increase if the public approves increases to the flood tax to help with flood preparation and infrastructure. Homeowner property value assessments have also risen considerably in 2024, leading to an overall higher property tax bill.
Billion Dollar Tax Cuts in 2023
Despite the recent tax hikes in Harris County and other counties due to inflation and the cost of disaster clean up, 2023 saw one of the largest property tax cut bills in recent history, signed by Governor Greg Abbot as part of his reelection campaign. The package totaled 18 billion dollars and included an increase in the Homestead Exemption from $40,000 to $100,000. The new exemption, that was mixed with additional school tax cuts to save even more, brings an average property tax reduction of $1,300 a year in property taxes. Disabled homeowners and those over the age of 65 saw an increase to $110,000 in comparison to the previous $40,000 they were eligible to claim. Overall, the bill reduced millions of Texas homeowners’ property tax bill by 40%.
Property Taxes in 2025
Texas lawmakers are still looking to reduce property taxes as a whole, if not eliminate them entirely. Whether that’s financially feasible is an entirely other discussion. Ultimately eliminating property taxes, or even reducing them significantly, would mean an increase in other taxes statewide. Currently Texas Republicans in the state house are looking at eliminating property taxes but the discussion also involves finding ways to absorb an 81.5 billion dollar deficit, which would likely include large raises in other areas like sales tax. Currently, Texas property taxes remain some of the highest nationwide. Texas officials, do however, remain committed to slashing property taxes as much as possible.
Preparing for the Future
While the future of property taxes is still uncertain, homeowners should prepare for certain reasonable increases, like those related to disasters and inflation, in their budget. Even though lawmakers are looking to reduce property taxes, if not eliminate them, there is never a guarantee this will happen. If property taxes are already too large of a burden on your home and you have found yourself delinquent on your property taxes, call Johnson & Starr to learn of your property tax loan options, to avoid foreclosure, and prepare for your property taxes in 2025.