Big savings or a drop in the bucket? Here’s one way Texas may cut your property taxes

A plan to increase the Texas’ homestead exemption could save homeowners roughly $400 dollars a year.

It’s a starting point in the Senate as lawmakers begin to craft bills aimed at cutting property taxes. Gov. Greg Abbott has vowed to deliver the “largest property tax cut in the history of the state of Texas.”

Earlier this month Lt. Gov. Dan Patrick promised to increase the homestead exemption on school property taxes by $30,000. This would likely be combined with other plans to cut taxes.

As the law stands, Texas home owners can generally have $40,000 subtracted from the appraised value of their primary residence for property tax purposes. For example, the owner of a home appraised at $340,000 would pay school property taxes on $300,000 of the home’s value.

Patrick, during his Jan. 17 inaugural address, said the $70,000 exemption would save Texans “thousands of dollars” over the lifetime of a home.

“Enough to make a difference,” he said from a podium outside the Texas Capitol.

Early draft budgets in the House and Senate allocate $15 billion for property tax relief.

The Senate proposes spending $3 billion on the homestead exemption increase, leaving about $6.7 billion for other cut-costing measures like driving down tax rates. The Legislature may also look at further limiting the year-to-year increase in appraisals for tax purposes, said Dale Craymer, president of the Texas Taxpayers and Research Association.

Lawmakers entered the session with a nearly $33 billion dollar budget surplus.

Property taxes are set locally but lawmakers can lower them by sending more money to school districts

“The governor and the speaker and the members will come together, and we’ll find a way that’s long term property tax relief with billions of dollars from this surplus, because you come first,” said Patrick, a Republican. “It’s your money.”

North Texas residents welcomed the idea of an extra few hundred dollars each year.

Laura Wells of Fort Worth compared the $400 savings to a car payment. “That would be helpful,” she said.

But some, while receptive to any property tax break, questioned whether the increase in the exemption would make a big difference.

“It’s better than nothing, but if you pay taxes, like $9,000 a year, and they take of $400, it’s not like you’re going to feel it,” said Philbert Bimenyimana of Haslet.

Homeowners who live in the Fort Worth school district would save $384.50, according to a Star-Telegram analysis using 2022 tax rates, the most recent available. Arlington school district homeowners would save $392.60, Keller school district home owners would save $381.90 and Mansfield school district homeowners $400.40. The actual savings amount would be calculated using future tax rates, including any reductions required by law after the 2023 session and any reductions under House Bill 3 passed in 2019.

“On the lower end of the economic spectrum, it’s huge,” said Chandler Crouch, a Fort Worth real estate agent who assists people with property tax appraisal protests. “On the upper end, it’s nothing. It’s a drop in the bucket.”

Benbrook resident Christa Streebin agreed that the extra money would benefit low-income people.

“When you’re talking about families experiencing poverty in Tarrant County, $400 of savings is a huge bonus for them,” Streebin said.

Crouch, while supportive of any idea that offers relief for homeowners, is skeptical that the Legislature will find a “real solution” for property tax relief. He also expects home values to increase later this year, which probably means higher tax bills next year, Crouch said.

“Whatever savings they get as a result of this will get swallowed up, and it will be as though it didn’t exist on the very next year,” he said.

Some Democrats have also called for raising the homestead exemption, including House Democratic Caucus Chair Trey Martinez Fischer, who said he’d support the exemption going beyond $70,000, according to NBC 5.

Abbott, a Republican, didn’t offer specifics during a Wednesday news conference on ways he’d like to see property taxes cut or say whether he supports increasing the homestead exemption. He did advocate for using more than the proposed $15 billion for relief. House Speaker Dade Phelan, a Beaumont Republican, declined to comment through a spokesperson on whether he supports raising the homestead exemption.

“Property taxes are killing our homeowners in this state in particular, and they need relief, and they are going to get relief,” Abbott told reporters. “I will say that $15 billion is a good start for the amount of relief we will provide. I will of course be pushing for even more than that for our taxpayers.

“As it concerns the strategies used to provide that relief, that’s something that we will work on during the course of the session.”

The last day to pay property taxes in Tarrant County without penalty and interest is Jan. 31.