New Year Means New Texas Property Tax Law

After many months of negotiating, a property tax relief package known as Proposition 4 was passed with 83% of the vote from the Senate and House last November. This law became effective on January 1st, 2024, meaning Texas homeowners and businesses should have received a property tax cut in their 2023 property tax bill. Here’s a guide to help you better understand the new Texas property tax law.

How Does this New Law Reduce My Taxes?

This law went into effect at the start of the new year, using an $18 billion property tax package to reduce statewide taxes. Here are three ways the package was implemented:

1. Texas plans to use part of the $18 billion to enhance the affordability of education for property owners. This means each school district will receive support from the state to reduce its initial tax rate by $0.107, easing the financial burden for property tax owners. The state will compensate the school districts for the difference in revenue.

2. Texas homeowners will see their homestead exemption increase from $40,000 to $100,000 of their home’s assessed value. The homestead exemption will only apply to one property and it can only be your primary residency. If you already have an exemption, the changes will automatically be applied. According to Texas legislators, the average homeowner will see a savings of $1,200 on their property tax bill.

3. A new three-year pilot program called a “circuit breaker” will be put into effect. This “circuit breaker” is applied to all non-homestead exempt properties valued at or below $5 million. If a non-homestead property jumps in value by more than 20% in a year, the circuit breaker will limit the taxable portion of that bill by the previous year’s value plus 20%.

What If I Am Still Struggling to Pay My Property Taxes?

Although this is known as one of the biggest property tax cuts in Texas history, Texas will continue to have some of the highest property tax rates in the nation. So, if you are delinquent on your property taxes, don’t worry, but do take steps to get them paid quickly! Johnson & Starr understands the difficulties of being hit with a property tax bill in one lump sum, which is why we provide fair, flexible, and easy-to-understand loans. We pay off your taxes in full then you can pay us back on a schedule that works for you. So, do not hesitate to get help. Fill out our quick and simple application here or contact us today at 888-508-3894 to speak to one of our certified loan officers.