What possible $18 billion property tax relief could mean for central Texas
WACO, Texas (KWTX) - Texas Lawmakers agreed on a deal worth about $18 billion to bring property tax relief to homeowners and businesses.
Lt. Gov. Dan Patrick and Texas House Speaker Dade Phelan announced a deal this morning after a months-long standstill.
Experts like Rob Tennant, an accounting professor for Texas A&M University-Central Texas, said this is a win-win for the taxpayer and the economy.
“It will definitely infuse a large amount of cash back into the Texas economy. It will help families that have been struggling with the rapid rate of growth within the last five years.”
School districts affect the value of nearby homes.
The president of the Waco Association of Realtors, Mike Sims, weighs in as more than $12 billion will be spent on reducing the school property tax rate for homeowners and businesses.
“That’s where the biggest reduction is coming from. The state is going to be funding the schools from their budget, instead of the homeowner’s budget.”
Senator Paul Bettencourt, the author of Senate Bills 2 and 3, said regular homeowners will save about $1,266 in year one and $1,312 in year two, while those who are disabled or over the age of 65 will save a little more on their school district property tax bill.
More than 5 million Texas homeowners will get a $60,000 increase in their homestead exemption from $40,000 to $100,000. That tax break reduces your homes taxable value.
“It’s almost three times larger of the exemption. Less of your house is being taxed, is the simple way of putting it,” said Tennant.
As part of a temporary three-year program, the value of rental or commercial properties worth less than $5 million cannot go up more than 20%.
The biggest concern for investors? What happens when the three years are up?
“In later years there’s uncertainty because for it to continue, the legislature would have to extend it,” said Tennant.
“10 years from now, are they going to be able to do this? Right now, they can because of that rainy day fund they have. So hopefully they’re able to do this during the downturn,” said Sims.
Local experts said some property relief is necessary because most homeowners in central Texas cannot afford their property taxes.
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