The Texas Senate is once again poised to pass legislation that would increase the homestead exemption for property owners in the state. Last session, in 2023, state lawmakers increased the exemption to $100,000. Now, as The Texas Newsroom’s Blaise Gainey reports, this new proposal would increase that exemption even more.
In a bipartisan fashion, Senate Bill 4 and Senate Joint Resolution 2 passed unanimously in a Senate committee on Tuesday. If the proposals ultimately make it to the governor’s desk, voters will get to decide whether or not they want to adopt the change — raising the homestead exemption to $140,000. The exemption reduces how much of a home’s value owners can be taxed on.
So, basically: A bigger homestead exemption results in lower property taxes.
Since Texas has no income tax, increasing this is one of the few effective ways lawmakers can provide tax relief to residents.
One concern? Taking that property tax money away could hurt school districts which receive a nice portion of that cash. But University of Houston Political Scientist Brandon Rottinghaus says Texas legislators keep that in mind.
ROTTINGHAUS: “Basically, any taxation lost at the school district level the state will make up in general revenue.”
To cover that loss in property tax revenue, the state will have to send billions to school districts to fill in the gap. Which is fairly easy for Texas right now, when the state has more than 20 billion in surplus funds.
But Shannon Halbrook with Every Texan worries about what could happen in the future when that isn’t the case.
HALBROOK: “It’s impossible to know whether it’s sustainable. We might have the money now, you know, we have these big carry over balances. But that’s not going to continue forever. And eventually there will be an economic downturn and then they’ll have to figure out how to cover all this stuff.”
For now, lawmakers in the Texas Senate are all in on the proposal. 28 legislators have sponsored the bill. And Lt. Gov. Dan Patrick’s called property tax relief a priority this session — so he’s already approved of the measure. I’m Blaise Gainey, in Austin.
