Texas homeowners will save about $780 annually based on Senate Bill 2, which passed in the second special session in 2023. Key aspects of SB 2 are:

  • Increased school property tax homestead exemption from $40,000 to $100,000, effective January 1, 2023
  • Implementing a 20% “circuit breaker” (aka cap) for non-homestead property valued at less than $5,000,000 in 2023, for 2024 to 2026.
  • Revision of appraisal district governance by adding three seats to the six member boards, to be held by members of public. These three public members have to approve the appraisal review board members.

School Property Tax Relief

The school property tax homestead exemption has increased from $40,000 to $100,000. Based on a 1.3% school tax rate, this component will save the typical homeowner $780. Since school taxes are typically half of property taxes, SB 2 eliminates the school tax for the first $100,000 of value. tax bills due by January 31,2024, will benefit from the change

20% Circuit Breaker for Non-Homestead, Under $5 million; 2024 to 2026

This provision has limited applicability given the $5 million ceiling and the limited term of 2024 to 2026. The 20% circuit breaker expires on December 31, 2026, unless renewed by the legislature. It is difficult to handicap whether the legislature will extend this section.

Citizen Oversight of Appraisal Districts

The section of SB 2 increases the number of members of the appraisal district board of directors from six to nine, for counties with a population of at least 75,000.Currently, All members of the appraisal district board of directors are representative of tax entities. Tax payers are not represented on the appraisal district board of directors. The public members of the board of directors will be elected starting with the uniform election date in May 2024. The directors elected take office on July 1, 2024, and serve a term that expires December 31, 2026. The elected members will serve staggered terms and the terms for representatives of tax entities will also be staggered. Two of the three elected members of the board of directors must approve the members of the appraisal review board. This section provides opportunity to add balance to ARB decisions.

The Texas legislature did good work in 2023. Thank your state senators and representatives.

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