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Lt. Gov. Dan Patrick Op-Ed: The Homestead Exemption is Real Property Tax Relief

“The Texas Senate plan delivers more savings to homeowners than the House alternative.”

“When I became lieutenant governor in 2015, the Texas Senate and I increased the homestead exemption from $15,000 to $25,000. In 2021, we increased it to $40,000. This year, Senate Bill 3, by Sen. Paul Bettencourt, R-Houston, will increase the homestead exemption for all Texans under 65 to $70,000, and a whopping $100,000 for seniors over 65. These exemptions exist for the lifetime of a homestead and are permanent. For example, under Senate Bill 3, a senior living in a $250,000 home would be taxed on a $150,000 home value. If a homeowner is under 65, they would be taxed on a $180,000 home value. That’s real tax savings worth thousands of dollars to homeowners over the life of their mortgage.

“The Texas House plan to set a 5% appraisal cap is of absolutely no tax benefit to seniors, who already have their appraisals frozen, and little to no benefit to those under age 65. The Senate’s plan saves homeowners over $27 billion more than the House’s appraisal cap plan over the life of the average home mortgage.

“Appraisals, even if higher, are essentially no longer a factor in your final tax bill that you receive in the fall. That’s a result of legislation we passed in 2019. Before then, it was correct to say that your tax bill closely tracked your appraisal value, but that is no longer true. That’s why in the spring of 2022, even though some people received higher appraisals, their final tax bill did not reflect those increased appraisal values.

“The landmark legislation passed in 2019 limited local (county and city) governments from increasing their revenues by more than 3.5% and school districts by more than 2.5%. As appraisal values go up in the spring, local taxing entities must lower the tax rate to get to the 3.5% and 2.5% limits on budget growth. Limiting local government budget growth is the best way to lower property taxes.

“Ownwell, an Austin-based property tax technology firm that represents tens of thousands of homeowners across Texas, studied how the disastrous consequences of the Texas House’s appraisal cap plan would affect the Dallas-Fort Worth area:

  • 76.2% of tax relief would go to non-homesteads
  • 42% of tax cuts would go to the top 20% most valuable properties
  • Seniors over 65 (approximately 40% of all homesteads) would receive no benefit at all, since the bulk of their property taxes are subject to preexisting tax ceilings
  • 15.3% of relief would flow out of state to non-Texans

“Colton Pace, Ownwell’s CEO, said that to compensate for appraisal caps, property tax rates in Dallas would need to increase more than 20% across five years to maintain funding for schools and local governments. And homeowners living on the same street would see wide gaps in their property tax bills depending on when they bought their home.

“As lieutenant governor, I will not negotiate on taking $27 billion of tax cuts away from homeowners. The Senate’s plan is supported by Realtors, business associations, tax experts and former President Donald Trump. They support the Texas Senate’s property tax relief plan because they know real tax relief when they see it.”

This op-ed was published by the Dallas Morning News this morning and can be read here.

1 Comment

  1. Larry Carr on May 13, 2023 at 7:32 pm

    As a 74 year old native Texan, I’m ready for a tax break on my home I bought and paid for several years ago. I can’t help but wonder who’s hands are under the table concerning the House bill. Seems the Democrats are not looking our for my best interest. Please, Please hold the line and get the Senate plan approved before the session ends. Thank You for allowing me to comment!

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