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Texas Passes Historic Property Tax Reduction Bill; What It Means to Irving Homeowners

In a historic move, Texas voters have overwhelmingly approved Proposition 4, marking the passage of the largest property tax reduction package in the world. Senator Paul Bettencourt (R-Houston) lauded the success of the constitutional amendment, hailing it as a significant victory for Texas homeowners and businesses alike.

Proposition 4, the result of collaborative efforts by Representative Will Metcalf (R-Conroe) and Senator Bettencourt, is linked to the $18 billion property tax reduction bill, SB 2, aptly nicknamed the "Texas Two-Step." The legislation introduces a $100,000 homestead exemption and an 18% decrease in Maintenance and Operations (M&O) property tax rate compression.

Senator Bettencourt, who has championed property tax reform for nearly two decades alongside Lt. Governor Dan Patrick, expressed his satisfaction with the outcome. He stated, "This is record property tax reduction in the United States! There is one State in the Union that just voted for $18.1 billion of property tax reduction, Prop. 4, and that’s the State of Texas!"

The comprehensive tax reduction package encompasses several key provisions:

  1. Homestead Exemption Increase: The homestead exemption for Texas homeowners will rise to $100,000, effective immediately on this year's property tax bill. Additionally, a "catch-up" adjustment for the $15,000 homestead exemption increase from the May 2022 statewide election will benefit over-65 and disabled individuals.

  2. M&O Property Tax Rate Compression: Homeowners will benefit from an 18% decrease in the M&O property tax rate compression.

  3. Franchise Tax Exemption Expansion: SB 3, also spearheaded by Senator Bettencourt, doubles the franchise tax exemption, removing 67,000 Texas businesses from the franchise tax roll starting in 2024.

  4. County Appraisal District Reform: In May 2024, three county citizens will be elected county-wide to join each County Appraisal Districts (CAD) board of directors in non-partisan positions. These elected directors will play a role in selecting members of the Appraisal Review Board (ARB) in counties with a population of 75,000 or greater.

  5. Circuit-Breaker for Non-Homesteaded Real Property: Non-homesteaded real property valued at $5 million and under will receive a 20% circuit-breaker on appraised value increases as part of a three-year pilot project, set to sunset on December 31, 2026. The constitutional fund established to finance SB 2's property tax cut will remain evergreen.

Senator Bettencourt emphasized the significance of returning money to the people, stating, "It’s great to give people their money back from excess budget collections."

The bill, HJR 2, received unanimous support in the Texas Senate and passed the Texas House with a vote of 132-5.

When will Irving homeowners start feeling the effect of the tax break?

Now with the passage of Proposition 4, SB 2 will be retroactively in effect as of January 1, 2023 and the changes will be on Texas Taxpayers’ Fall property tax bill. SB 3 goes into effect January 1, 2024


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