Texas homeowners and businesses can breathe a sigh of relief as the long-awaited property tax relief promised by Republican leaders inches closer to fruition.
The journey towards this goal reached a significant milestone on Thursday evening, with both the House and Senate successfully passing three bills collectively amounting to a substantial $18 billion in property tax cuts.
This significant sum, earmarked for tax relief, will be sourced from the substantial surplus of nearly $33 billion in the state budget.
As Texas revels in its financial stability, these surplus funds will now be channeled towards alleviating the burden of property taxes for residents and businesses alike, offering a much-needed respite from escalating financial pressures.
This Is What the Legislation Accomplishes
It lowers the rate of school property taxation for all households and businesses.
The property tax exemption will be increased to $100,000 for most householders and to $110,000 for those over 65 and disabled.
For a property worth $330,000 (the average in Texas), lawmakers claimed it’s worth around $2,600 in benefits during the first two years of ownership for most homeowners, and nearly $3,000 for residents over 65 and/or disabled.
Increases in estimated values for business premises and non-homestead residential properties are similarly limited by the Act.
The legislation saves small businesses money by raising the franchise tax exemption to nearly $2.5 million.
Exemption From Paying the Franchise Tax
According to lawmakers, this implies that 67,000 small businesses in Texas will not have to pay the franchise tax at all. The bills will now be signed by Governor Greg Abbott.
This year’s property tax reduction will be retroactive.
The plans do not provide refunds to renters or raises for teachers, as some Democratic lawmakers advocated last week. The Senate had already approved temporary teacher bonuses, but they were not included in the final measures.
Republican leaders have stated that a third special session will be held this fall to discuss school financing, teacher compensation, and school choice.