(MENAFN- ValueWalk) homeowners will get a higher property tax rebate from Texas starting next year now that the voters have overwhelmingly approved Proposition 4 in the November election. Proposition 4 will permanently raise the homestead exemption on local school taxes, benefiting about 5.7 million households.
Property tax rebate from Texas: what does it include?
Lt. Gov. Dan Patrick applauded the approval in a tweet , calling it a“a massive victory in the fight against property taxes that takes effect this year.”
“Fighting for property tax reform is something Lt. Governor Dan Patrick and I have been doing together for almost 20 years in the making,” Houston Republican Sen.
Paul Bettencourt, who is also the author of the bill, said in an email statement.
Specifically, Proposition 4, which is an $18 billion property tax-cut package, includes the following provisions:
Raises the general school district homestead exemption to $100,000 per year per household (from $40,000). Gives the legislature the power to set a cap on the annual increase in appraised value of non-homestead real property. Creates a provision to ensure the property tax rebate from Texas doesn't count toward the constitutional spending limit. Gives the legislature the authority to create four-year terms for members of the appraisal entity's governing body in counties having more than 75,000 residents.
Additionally, the package sets aside $7.1 billion from the state's $33 billion surplus to school districts to enable them to reduce their property tax rates. Now, an eligible homeowner will receive a $750 to $1,500 windfall annually in terms of less taxes paid. The legislation doesn't directly impact renters .
In all, Proposition 4 will result in more than $2,500 in tax savings over the next two years for an average homeowner, with seniors benefitting the most. It must be noted that the Proposition 4 changes will apply to the 2023 tax bills due in January.
Proposition 4: how it finally became law
About 84% voted in favor of Proposition 4, which raises the homestead tax exemption and provides property tax relief. Proposition 4 was a package deal, so voters weren't able to vote on the amendments they supported.
Property tax cuts were a major issue heading into the Texas Legislative session. The House and Senate negotiated for months to determine the best way to achieve those cuts.
Gov. Abbott called a special session for the property tax and border security three hours after the end of the 88th regular session. Lawmakers , however, failed to reach a deal at the end of the first special session mainly due to the rift between the House and Senate.
Lt. Gov. Patrick, on the other hand, continued to support the increase in the homestead exemption.
Gov. Abbott then called a second special session in June specifically for the property tax relief. Eventually, property tax relief bills SB 2 and SB 3 made it to Abbott's desk. These bills were signed into law successfully in late July.
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