Texas Homeowners Score Big Win Against Rising Property Taxes!

Attention, Texas homeowners! Exciting news is on the horizon as new regulations take effect this year, potentially unlocking substantial property tax savings just for you!

In an effort to keep you informed, we’ve reached out to officials for insights regarding these changes.

Why You Should Care

While Texas doesn’t impose a state property tax, homeowners pay local taxes that significantly fund essential services—schools, roads, law enforcement, and emergency services, to name a few. Did you know that Texas residents face the seventh-highest property taxes in the entire country? That’s a hefty bill!

Currently, the average effective property tax rate hovers around 1.60 percent—much higher than the national norm of 0.99 percent. This translates to an average annual property tax payment of about $3,797 for the typical homeowner across the Lone Star State. It’s clear that managing these costs is crucial!

What You Need to Know

In Texas, property tax amounts are calculated based on your home’s market value, re-evaluated annually by county appraisal districts. These appraisals typically happen at the beginning of the year, while tax bills roll out starting October 1 and are due by January 31 of the following year.

For those residing within school districts, homestead exemptions offer a fantastic opportunity for tax relief—available to homeowners living in their primary residence.

Thanks to Senate Bill 2, also known as the Property Tax Relief Act, the homestead exemption has skyrocketed from $40,000 to an impressive $100,000, with even greater benefits for seniors over 65, who can see their exemption rise to $110,000.

Additionally, starting January 1, a new “circuit breaker” was introduced, placing a 20 percent cap on the taxable value of non-homestead properties valued at $5 million or less for 2023. The impact? An estimated 84.1 percent of all multifamily properties in Texas would have benefited from this regulation if applied retroactively.

But here’s a key point: If a property is sold, the new owner will not inherit the capped value; it must be reassessed.

While there have been several increases to homestead exemptions in recent years, some residents have voiced concerns that these changes will do little to alleviate the pressures of rising appraisals. The newly introduced circuit breaker aims to address these worries directly.

What the Experts Are Saying

Texas Governor expressed his commitment to property tax reform when he signed SB2 into law, stating, “Today, I am signing a law that will ensure more than $18 billion in property tax cuts—the largest property tax cut in Texas history … Texas homestead exemptions will rise to $100,000, ensuring that senior homeowners are protected from being priced out of their homes.”

What Lies Ahead

While these new regulations promise relief for homeowners, they do raise eyebrows among local schools, which depend on property taxes for their funding. Should schools encounter budget shortfalls due to reduced property tax revenues, they can petition for additional state funding.

Are you a Texas homeowner? We want to hear your thoughts on the newly implemented circuit breaker limits and whether they provide the relief you need. Share your opinions with us!