AUSTIN (KXAN)
Voters in Texas will soon cast their ballots on 17 proposed amendments, including two key residential property tax exemptions: Propositions 11 and 13.
So, what’s the gist of these two propositions?
Overview of Propositions 11 and 13
If approved by a majority, Propositions 11 and 13 could reduce property taxes by enhancing exemptions for homeowners. Proposition 11 specifically seeks to increase the tax exemption for elderly and disabled homeowners—ramping it up from $10,000 to $60,000 based on a home’s market value.
Meanwhile, Proposition 13 aims at a larger scale, raising the property tax exemption for school districts from $100,000 to $140,000.
Support for the Amendments
These propositions were introduced by state Sen. Paul Bettencourt (R-Houston) via Senate Bills 4 and 23 during this year’s regular session.
Bettencourt’s office claims that these changes could save approximately $484 annually for Texas homeowners, $907 for more than 2 million seniors, and $2,500 for small business owners.
In total, these amendments might enable seniors and people with disabilities to save up to $200,000 on property taxes over time. Some experts during Congressional hearings have suggested that with Proposition 11, a significant portion of seniors—perhaps 80% to 90%—could end up paying no property taxes at all.
Concerns About the Amendments
On the flip side, if Propositions 11 and 13 are passed, schools could see a revenue drop of around $3 billion. Bettencourt asserts that this loss will be compensated through state budget surpluses.
However, some skeptics argue that these exemptions might not truly alleviate the tax load for Texans but rather push it elsewhere. Chandra Villanueva, director of budget and policy at Every Texan, a nonprofit focused on equitable public policy, expresses that making a permanent property tax exemption constitutional could undermine a vital revenue stream for the state.
Drawing a comparison, she likens the tax structure of other states to a three-legged stool—made up of income tax, property tax, and sales tax. Notably, Texas does not impose an income tax. As she puts it, “When you start cutting property taxes repeatedly, you’re bound to become more reliant on sales tax, which is the most regressive and unpredictable tax.”
Definition of a Homestead
In Texas, qualifying as a homesteader means you own and occupy the property as your main residence. To apply for a housing tax exemption, you must meet title and occupancy requirements by January 1 of the tax year in question.
Homesteads in Texas can be categorized into urban, rural, or business types.
An urban homestead refers to up to 10 acres in a city area, receiving services from three municipalities, like water and electricity.
A rural homestead is a main residence outside city limits; families can own up to 200 acres, while individuals can have 100 acres.
Lastly, a business homestead is defined as an urban property serving as both a residence and a business site. Notably, homestead tax exemptions and protections apply to individuals, not corporate entities like LLCs.
