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Texas Legislature Passes Two Property Tax Relief Bills – What to Know

On Tuesday, May 6, 2023, the Texas House and Senate passed two differing property tax relief bills during the first day of the special session after months of negotiating. Both bills are meant to spend money on what is called a property tax compression (lower tax rate) and use $12.3 billion to reduce Texas property taxes. However, the House and Senate are in disagreement as to which plan would be more beneficial for Texans, making it unclear if lawmaker egos may prevent property tax cuts from occurring even though all agree they are needed. In this blog, we will help explain what these two bills are and what they could mean for property Taxes in the state of Texas.

The House’s Property Tax Bill

On Tuesday, the House speaker and Texas governor came to an agreement on a property tax plan called House Bill 1. This bill will use the $12.3 billion in savings to lower school district property tax rates, across the board. By using this approach, all property owners will be saving money, including homeowners, businesses, and landlords. To do this, they will reduce the property tax rates by 0.16 cents per 100 dollars in public school districts’ maximum tax rate for the 2023-24 school year. This reduction helps all property owners, including commercial and rental properties, and does not change the current homestead exemption.

The Senate’s Property Tax Bill

The second bill passed on Tuesday, Senate Bill 1, is supported by the Lt. Governor of Texas. This bill also has reduced school district property tax rates, though not a large. However, Senate Bill 1 will also use the savings to expand Texas’s homestead exemption. This bill is pushing for a plan that lowers the tax rate by 0.10 cents, 0.06 cents less than what the House is pushing for, and increasing the homestead exemption for school taxes to $100,000.

Currently, the homestead exemption is set at $40,000, and they are looking to increase it by $60,000, plus an additional bump for homeowners with disabilities or over the age of 65. The purpose of Senate Bill 1 is to save more money for homeowners by allowing Texans who own primary residences to subtract a large chunk from the taxable value of their homes. To learn more about homestead exemptions, check out our blog here: https://johnsonandstarr.com/texas-homestead-exemptions-what-they-are-and-when-to-file/

How this will Impact Texas Property Taxes

Fortunately, whether the property tax relief is entirely focused on homeowners, or a substantial portion goes to businesses and landlords, both the House and Senate are working towards lowering property tax rates for Texans. This will positively impact the lives of all Texans by reducing the amount paid in property taxes and decreasing the number of Texans who become delinquent. This will save Texans from interest, penalties, fees, and the possibility of foreclosure. However, under Texas law the House and Senate must agree on a bill to send to the Govenor for signature. It isn’t yet clear how that will happen.

Looking for Property Tax Relief?

Texas property taxes are currently some of the highest in the nation and can be challenging to pay on time. Luckily, Johnson & Starr understands the stress of paying past-due property tax bills. That is why we proudly serve Texas and Texans by providing Property Tax Loans that save homes. Our goal is to provide all customers with the financial support they need and the peace of mind that comes with it. Learn more – give us a call today at 877-378-3182.