In the most recent special session of the Texas Legislature, Senate Bill 2 was passed which will provide property tax relief for Texas homeowners.  The state budget has a surplus of some $33 billion, and lawmakers decided to use more than half of that to lower property taxes.  Texas, which has no income tax, does have some of the highest property taxes in the nation.

The new law will increase the Homestead Exemption to $100,000 from the current $40,000.  The Homestead Exemption applies only to school taxes.  The new higher exemption will lower a homeowner’s school taxes, but will not affect his or her County and City taxes.  The state will make up the difference to local school Districts with $5.3 billion of the budget surplus.

Also the new law includes a decrease in the school tax rate, or “tax compression,” of 10.7-cents per $100 of valuation.  Again this will be made up to the school districts with $12.6 billion of the state budget surplus.

Texas Senator Paul Bettencourt, from Houston and author of SB 2, said the new law will save the average Texas homeowner $1,300 in property taxes.  Here in Brown County, where the median sales price of a home was $170,000 in 2022, the new law will decrease school taxes by about $700 on that house.

The new homestead exemption requires an amendment to the Texas Constitution, which must be approved by the voters on November 7.  Brett McKibben, Chief Appraiser of the Brown County Appraisal District, said the 2023 Tax Statements that will be issued in October will reflect the higher homestead exemption and the compressed tax rate, assuming that voters will approve in November.  If voters do not approve, the Appraisal District will send a supplemental tax statement to all homeowners.