At last! Texas lawmakers have struck a deal on property taxes after months of squabbling.
The Texas Legislature and Gov. Greg Abbott agreed on an $18 billion tax-relief package to aid property owners in the state, the Dallas Morning News reported. Abbott and House Speaker Dade Phelan have been at odds with Lt. Gov. Dan Patrick over how to best spend a budget surplus on property tax relief.
It’s a breakthrough for the “big three,” which came during a second called special session of the legislature. Phelan has pushed for lowering the cap on homestead appraisals, while Patrick has advocated for increased homestead exemptions. Abbott even said he wants to “end property taxes” in Texas.
Under the legislation, up to $100,000 of a home’s value won’t be subjected to school property taxes. For a home appraised at $300,000, the owner would pay taxes as if the home was worth $200,000. The current law allows exemption of up to $40,000 of a home’s value.
The proposal would reduce school property taxes by almost 11 cents per $100 of assessed value, equating to $12 million over the next two years. The state will provide funds to school districts to offset their loss of property-tax revenue, the outlet said.
For non-homesteaded properties valued at $5 million or less, owners “will receive a 20 percent circuit breaker on appraised values as a 3-year pilot project,” Phelan and Patrick said. That includes commercial and residential properties.
The “circuit breaker” is a way to adjust property taxes based on income.
The legislation will also allow small businesses to pay less in franchise taxes — a fee that most businesses must pay in Texas, with the percentage ranging from 0.375 to 0.75 depending on a company’s net worth.
“The deal represents a significant win for providing relief to Texas property owners and reflects the commitment of Texas leaders to address the concerns of taxpayers and provide significant relief from the burden of escalating property taxes,” Patrick and Phelan’s release said.
It could provide relief for 5.7 million homeowners, the outlet said. To take effect, voters will have to approve the legislation on Nov. 7.
—Quinn Donoghue
Read more
Politics
Austin
GOP squabbles over property tax in Texas
Politics
Austin
How real estate did in this Texas Legislature
Politics
Texas
Huge property tax cuts proposed