What Texas Homeowners Need to Know About the 2023 Property Tax Cuts Bill
November 7th ballot: Proposition 4 provides the biggest property-tax relief package in Texas history
Homeowners are almost to the finish line to seeing relief on their property taxes!
The state has passed legislation that could significantly cut property taxes—something we've all been wanting, but didn’t think would happen anytime soon, right?
What needs to happen in order to lower Texas property taxes?
It’s now in the hands of Texas voters! Texas voters still need to give final approval to these tax cuts by voting on Proposition 4 during the November 7th ballot. MARK YOUR CALENDAR!
If approved, Texans would see the benefits on their 2023 taxes!
What are we voting on?
A massive $12.7 billion package of property tax cuts promising to deliver savings to millions of Texas property owners. The tax cuts aim to provide relief to property owners by reducing property taxes in Texas.
The bill author has estimated that voting for Proposition 4 will save the average Texas homeowner under age 65 about $1,300 per year. Those over 65 may see an average of about $1,450 in savings.
How will the tax cut help Houston area homeowners?
You might be wondering, "How does this impact me directly?" Fair question. Here are the key takeaways:
- Reducing School Rates: About $7.1 billion is earmarked to help school districts lower taxes, and this could mean a drop in your property tax rate by 10.7 cents per $100 valuation. Not too shabby!
- Doubling the Homestead Exemption: They're planning to more than double the current $40,000 exemption to $100,000. That means if you own a $350,000 home, you'll be taxed on a $250,000 value. That’s real savings!
- Temporary Appraisal Caps: There's a proposal to limit how much your non-homestead property's taxable value can increase—capping it at 20% a year if your property is valued under $5 million.
This is HUGE for not only Texans who own a home but also those looking to buy! Between record-high home prices in the Katy and Fulshear areas and rising interest rates, buyers need a break. Am I right?
Any Extras in the Package?
Sure, there are a few more perks:
- Franchise Tax Relief: If you own a business, the bill aims to raise the franchise tax limit. This could mean fewer forms to fill out or possibly no franchise tax at all.
- Elected Appraisal Officials: They're also looking to make appraisal positions elected, rather than appointed. A little more transparency never hurt anybody, right?
Where is the money coming from?
The money comes from a state surplus, mainly fueled by record sales tax collections taken over the past two years.
If the bill passes, what do I need to do to start saving on my taxes?
Good news! If the bill passes, you will start immediately and automatically feel the tax savings impact on your wallet. The only exception is the homestead exemption—if you haven't applied for that yet, it's time to head to your county’s appraisal district office.
Why should I vote?
Property taxes are a huge burden for Texans, so the measure should pass easily — but I don’t consider it a slam dunk. Why? Start with the low voter turnout, throw in some long and confusing ballot language, and anything could happen.
The amendment is 130 words, and nowhere does it say, “Vote here to lower your property taxes.” Instead, it uses technical terms like “adjust the amount of the limitation on school district ad valorem taxes.”
From homeowners insurance to higher cost of living, it's expensive to own a home right now but Proposition 4 could help.
It's not often that we get the chance to influence our property taxes. Let's make sure we don't miss out on this opportunity. What do you think? Ready to head to the polls?