What to Know About the Texas Property Tax Relief Bill Before Voting in November

After many months of disagreement, Texas lawmakers finally came to a compromise on Thursday, July 13, 2023, when the Texas House passed Senate Bill 2, advancing the property tax relief bill to Governor Greg Abbott for his approval. This compromise includes an increased homestead exemption and will deliver more than $18 billion in property tax cuts for businesses and homeowners. However, before this can go into effect, Texas residents will have to vote in a constitutional election on the property tax relief package on November 7, 2023. In this blog, we will give a breakdown of what is included in the property tax relief proposal to help you better understand what you are voting for.

What Are We Voting For?

With Texas having some of the highest property taxes in the nation, Texas lawmakers have been working towards lowering these property taxes by using Texas’s budget surplus for tax cuts. This took lawmakers several months of negotiations. Now the final decision comes down to Texas voters. This will determine whether or not Texans agree with this plan and the policies that were prioritized.

What is Included in the Texas Property Tax Proposal?

There are five parts to the Proposal:

• School Tax Compression – will reduce school district property tax rates by supporting public education with an additional $12 billion, lowering the amount of taxes schools levy on property owners.
• $100,000 Homestead Exemption – the current homestead exemption is set at $40,000, and will increase by an additional $60,000, plus an additional bump for homeowners with disabilities or over the age of 65. 
• Temporary Appraisal Cap – the law would limit appraisal value increases by 20% per year for non-homestead properties under 5 million as part of a 3-year pilot program.
• Franchise Tax Exemptions – exempting businesses with annual revenue of less than $2.47 million from the franchise tax, which is up from the $1.23 million exemption threshold. In addition, businesses that do not meet the new threshold for having to pay franchise taxes would no longer be required to file forms to report those taxes.
• Elected Appraisal Officials – under new legislation, each appraisal district’s board of directors will now include three positions elected by the majority vote at a county general election for four-year terms.

When Will this Take Effect?

In Texas, any new law that impacts the state budget must have approval from voters to pass an amendment to the state constitution. So, November’s election day ballot will ask voters whether or not they want the state to spend funds on property tax relief. If Texas voters approve the deal, the exemptions and cuts will be fully implemented by July 2024 and applied to your 2023 tax bill. To plan for this approval, tax assessors will prepare taxes as though the voters have approved the constitutional amendment. Meaning, Texas residents will receive a “provisional tax bill” on October 1st.

Need Help Paying Your Past Due Property Taxes?

While the Texas Property Tax proposal could help many Texans in the near future, property tax bills can still be overwhelming, even if they are reduced from the proposal. It also does not help if you are already behind on your property taxes. Being behind on your property taxes means your taxing authority has added penalties, interest, and fees, making it even harder to pay. Some people get sued over taxes and lose their homes—needlessly. So, you will want to settle your tax debt as soon as possible!

At Johnson & Star, we will immediately pay off your entire property tax bill and set up a flexible repayment plan that works for you. Contact us today to learn more about Johnson & Starr and how we can help you settle your property tax debt.