Texas Property Tax Relief: What Homeowners Need to Know

Texas homeowners could soon see a significant reduction in their property tax bills, thanks to Senate Bill 4. The bill proposes increasing the homestead exemption from $100,000 to $140,000, with an even higher exemption of $150,000 for seniors. If passed, this change could make homeownership more affordable for many residents in Texas.

What Is the Homestead Exemption?

The homestead exemption is a benefit that allows homeowners to reduce the taxable value of their primary residence. In Texas, the current exemption for school district property taxes is $100,000. This means homeowners pay property taxes on a lower taxable value, lowering their overall tax burden.

With Senate Bill 4, the exemption would increase to $140,000 for most homeowners, and $150,000 for seniors, which would result in a larger portion of a home’s value being tax-free. For many, this could lead to significant savings on their property taxes.

How Will This Impact Homeowners?

If the bill passes, homeowners could see their property taxes decrease, which would provide much-needed relief. In some areas, particularly those with lower tax rates, this could eliminate school district property taxes entirely for certain homeowners. The higher exemption would also mean reduced monthly payments for homeowners, helping them keep more of their money in their pockets.

For seniors, the increase in the exemption to $150,000 could provide an even greater level of savings, helping those on fixed incomes manage their tax burdens more easily.

What Happens Next?

While the bill has been approved by the Texas Senate committee, it still needs to pass the Texas House before going to voters in November 2025. Since the bill requires a constitutional amendment, Texas residents will have the final say on whether the exemption increase becomes law.

If approved, the new exemption would apply retroactively to 2025 tax bills, meaning homeowners could start seeing the benefits immediately.

Why Is This Important for Homebuyers?

For potential homebuyers, the proposed increase in the homestead exemption could make Texas real estate even more attractive. Lower property taxes would reduce the overall cost of homeownership, which could be a deciding factor for many buyers when choosing a location or home.

As a real estate professional, it’s crucial to stay informed about these changes, as they will likely have long-term implications for the housing market and tax planning.