Texas House, Senate push competing plans to rein in rising property taxes
With North Texas homeowners once again facing sky-high property tax appraisals, lawmakers are debating how to use the state's surplus to deliver some relief.
In the Texas Senate there's a plan that would increase the Homestead exemption, while the House has a proposal to cap assessed values from growing beyond 5 percent.
Experts say while the two proposals would save the average Texans about the same in taxes each year, they would have drastically different consequences.
North Texas homeowners getting 'sticker shock' with new property tax appraisals
Homeowners across North Texas have been getting their property tax appraisals, and they are coming with some sticker shock. Experts say home prices are up 20% over last year while inventory is down 30%.
One method would penalize you when you have to move, while the other would prevent small business owners from seeing any tax relief.
"The increase is just astonishing," said Traci Moilanen.
Moilanen says when she and her husband purchased their Plano home in 2021 it appraised for $686,000. Two years later, they are being assessed for $846,000.
"I know so many families like ours that we've discussed this with that can't afford this kind of increase every year," she said.
Mark Jackson, a social studies teacher who lives in Rowlett says his teaching salary is not keeping up with property tax increases that come from soaring appraisals.
"The year before last it jumped from 260 to 300, and now it's going from 300 to 350," Jackson said.
In the Texas House, lawmakers are proposing to lower the yearly cap on taxable values from 10 percent to 5 percent, but SMU economist Mike Davis says that kind of proposal has been tested in California and led to some issues.
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"People may enjoy low property taxes for a while, but when they sell their houses. The people who buy their houses are going to have to face a disproportionately high tax bill," Davis said.
If a homeowner needs to move closer to family or a new job, under this proposal, they would have to trade in their lower tax rate for a much higher one, making it difficult to avoid downsizing.
"The thing you worry about is having 2 people living, and very often, literally side-by-side in the same style of house, but one family is paying $10 or $15,000 more in property taxes than the other family," said Davis.
Texas House passes $12 billion property tax relief package, setting up fight over appraisal cap with Senate
House Speaker Dade Phelan has said tightening the appraisal cap is the best way to cut property taxes, but Senate tax-cut proponents, housing experts and business groups predict the move would have dire consequences.
To prevent those kinds of issues Lieutenant Governor Dan Patrick is backing a Senate proposal to increase the Homestead exemption.
Each proposal would save the owner of a $300,000 home around $650 to $700 a year, but Davis says the Homestead exemption comes with cons as well.
"It leaves out a lot of business property, and don't think about great big businesses, you know, corporations. Think about people who own barber shops, and neighborhood restaurants and people like that," he said.
Davis says there is a bright side to this debate: that lawmakers are arguing about how to cut taxes instead of raise them.
Since this item deals with the budget, the session can't end until an agreement is reached.