The recently passed legislation promises significant changes in what homeowners will pay for property taxes this upcoming January. With the average tax bill being $3,797 in recent years and State Senator Paul Bettencourt expecting an average savings of $1,373, this might be the most significant property tax reform in Texas history. These savings, provided voters pass the move in November’s election, can go a long way to counteracting the sharp increase in property taxes Texans have faced over the past few years. Additional property tax changes will help businesses and homeowners with no-homestead properties see tax relief.

Voting in favor of the changes this November is one thing residents can do to manage their future property tax bill costs, but there are other things you can do. Keep reading for more details about how the recent legislation will impact your property tax bill as early as this year and what other steps you can take to ensure you’re paying a fair amount of property taxes.

The Three Big Changes in Texas’s Newest Property Tax Laws

Rising property taxes have been a hot-button political and financial issue for years, and many Texas politicians are in office after running on a robust platform of property tax reform. Earlier this year, the Senate and the House proposed competing property tax relief measures that were evaluated and combined into the three bills passed this July. 

Here are the three most significant changes that may significantly reduce your property taxes:

1. Eligible Homesteaders Get a $100,000 Exemption

The most prominent change for Texas homeowners is the increased homestead exemption amount. Today, eligible residents can apply for a homestead exemption that offers these benefits:

• A $40,000 exemption in property taxes, which comes out to approximately $400 in direct savings
• Additional exemptions on a county-by-county level
• A 10% cap on assessed property value increases due to market changes
• Supplemental $10,000 exemption on school district taxes for seniors or disabled homeowners

Under the new provisions, that $40,000 increases to $100,000, saving each eligible homeowner $1,000 from that one line item change. 

Related: Top Property Tax Exemptions in Texas Every Homeowner Should Know

2. Other Properties Can Qualify for a 20% Property Value Increase Cap

Previously, the property value cap was reserved just for homestead properties. But under the ‘circuit breaker’ provisions of the new legislation, non-homesteaded properties like second homes, rental properties, and commercial properties are eligible for a 20% property value increase cap. This will prevent the assessed value of these properties from increasing by more than 20% in a given year due to market forces. 

For example, if you have an eligible non-homestead property valued at $250,000 in 2023, the appraised value cannot increase beyond $300,000 in 2024. This will be highly beneficial for property owners who rely on having predictable cash flow and expenses and whose business may be impacted by sudden jumps in property taxes. It can also provide some relief for renters, who would otherwise have had to pay those passed-along increases.

3. Voters Can Pick Three of the ARB Reps in Their Counties

While this third change in the new legislation is making fewer headlines, it will be impactful. When property owners protest their property appraisals in the spring, their case may go before a full Appraisal Review Board (ARB). In that hearing, the property owner will present their argument, and the county appraiser will defend their valuation. The ARB determines the final property appraisal amount that then gets entered into the appraisal district role. 

If this legislation passes, districts with more than 75,000 residents will elect three citizens for every county. This increases overall voter input and can result in more fair and democratically founded hearings.

The package includes additional measures, including provisions for redirecting billions of Texas’s surplus revenue toward education expenses to keep the education funding level. Since school district taxes account for a large portion of property taxes (and are the largest individual levy in property tax bills), Texas legislators assigned over $12 billion of Texas’s surplus revenue toward school funding.

 However, many constituents are worried about education funding in future years that may not have a sufficient surplus. Legislators continue to consider future sources of educational funding, measures for protecting renters from passed-on property tax increases, and long-term tax increases for non-homesteaded properties.

A Closer Look: How These Changes Fit Into Property Tax Calculations

Each change in the property tax relief package will significantly change the process of determining property tax bills for residents and business owners across the state. Consider this overview of the process and where the changes fit into the whole landscape:

• November 7th: Texas voters will decide whether the property tax cuts are passed. As part of the package, both chambers passed House Joint Resolution 2, which allowed the property tax cuts to be put to a vote as a constitutional amendment. If the measures are passed, they will retroactively apply to 2023 property tax bills that go out in October.
• January 31st: Most homeowners will pay a reduced property tax bill if the package passes the vote. The excess money in their escrow accounts will significantly decrease property tax payment installments across 2024.
• Spring 2024: Local appraisal district offices will send out Notices of Appraised Value that consider the property valuation caps for homesteaded and non-homesteaded properties.
• May 2024: Eligible voters in counties with over 75,000 residents can vote on the ARB representatives that will hear protest hearings throughout the late spring and early summer.

This process will be tumultuous for appraisal districts, lenders who manage escrow accounts, county tax officials, and homeowners. Practicing due diligence will also be essential, not just staying informed about pending developments. For example, property owners will want to ensure they apply—or currently hold—all the eligible exemptions. You may also want to pay close attention to your notices for the next year to ensure the new rules are represented, your property value is accurate, and you’re receiving all due savings. You can even communicate with your lending service to get an estimate on your anticipated mortgage amounts during the transition.

Related: How Property Taxes Affect Mortgage Payments

Why These Changes Aren’t Enough to Guarantee Fair Property Tax Bills

Despite the significant savings, your property tax bill will likely still be higher than five or six years ago. The real estate market, which continues to face increased demand and supply levels that simply can’t keep pace, drove property values to new heights. Those numbers will continue to have a wide-reaching impact on your tax bills for years.

When you receive your Notice of Appraised Value every spring, there are two main numbers: your property’s appraised value (sans homestead cap) and the final value for tax purposes. While that second number is the most crucial because it’s what county tax officials will use to calculate your taxes, that first number is still essential because:

• It pushes up the value of comparable properties in your neighborhood: Prospective property owners may get priced out of your neighborhood.
• Those numbers, in turn, weigh on how your property value increases over time: If your homestead exemption lapses because your property transfers to a family member or because you retain it as a rental property after moving, that first number plays a much more significant role in your new property value and tax bill. Also, even with an exemption in place, a homesteaded property can still have a 10% increase in value every year. Protesting your property taxes is essential for paying fair taxes, whether you have an exemption or not. Remember: the circuit breaker provisions in the tax relief package creating a 20% cap for non-homestead properties may be revoked. It’s only a three-year pilot program.

What You Can Do: Protest Your Property Taxes

Texas residents have a constitutional right to protest their property taxes if they believe they are unfairly high and don’t represent the property’s actual value. This takes place in the spring. While it’s colloquially called ‘protesting your property taxes,’ homeowners are protesting their appraisal value, which is then used to calculate tax bills in the fall. If you believe the district appraisal is too high, you or a representative can file a protest notice and present a counter-valuation.

The appraisal district may accept your counteroffer, offer a compromise, or schedule a full hearing before the ARB. There, you can submit your arguments and evidence to try and secure a lower appraisal value. For example, the county may have appraised your home’s value at $450,000; you believe it should be $350,000. The ARB may rule that the value should be $400,000. That new $400,000 number becomes your appraisal’s first number. The homestead or non-homestead exemption cap is applied to it, and then your school district tax exemption is applied on top of that.

Home Tax Shield Is Here to Help You Navigate the New Property Tax Laws

Are you excited about the potential property tax savings but worried you’re still overpaying taxes? Home Tax Shield can help. We represent homeowners throughout the property tax protest process. Our team can file a protest notice on your belief, appraise your home’s value, gather evidence to support a lower counteroffer and represent you in the hearing in front of the ARB. Sign up to get ready for the 2024 tax year.

Texas Property Tax Laws Are Changing: Do You Still Need to Protest Your Taxes?

The recently passed legislation promises significant changes in what homeowners will pay for property taxes this upcoming January. With the average tax bill being $3,797 in recent years and State Senator Paul Bettencourt expecting an average savings of $1,373, this might be the most significant property tax reform in Texas history. These savings, provided voters pass the move in November’s election, can go a long way to counteracting the sharp increase in property taxes Texans have faced over the past few years. Additional property tax changes will help businesses and homeowners with no-homestead properties see tax relief.

Voting in favor of the changes this November is one thing residents can do to manage their future property tax bill costs, but there are other things you can do. Keep reading for more details about how the recent legislation will impact your property tax bill as early as this year and what other steps you can take to ensure you’re paying a fair amount of property taxes.

The Three Big Changes in Texas’s Newest Property Tax Laws

Rising property taxes have been a hot-button political and financial issue for years, and many Texas politicians are in office after running on a robust platform of property tax reform. Earlier this year, the Senate and the House proposed competing property tax relief measures that were evaluated and combined into the three bills passed this July. 

Here are the three most significant changes that may significantly reduce your property taxes:

1. Eligible Homesteaders Get a $100,000 Exemption

The most prominent change for Texas homeowners is the increased homestead exemption amount. Today, eligible residents can apply for a homestead exemption that offers these benefits:

• A $40,000 exemption in property taxes, which comes out to approximately $400 in direct savings
• Additional exemptions on a county-by-county level
• A 10% cap on assessed property value increases due to market changes
• Supplemental $10,000 exemption on school district taxes for seniors or disabled homeowners

Under the new provisions, that $40,000 increases to $100,000, saving each eligible homeowner $1,000 from that one line item change. 

Related: Top Property Tax Exemptions in Texas Every Homeowner Should Know

2. Other Properties Can Qualify for a 20% Property Value Increase Cap

Previously, the property value cap was reserved just for homestead properties. But under the ‘circuit breaker’ provisions of the new legislation, non-homesteaded properties like second homes, rental properties, and commercial properties are eligible for a 20% property value increase cap. This will prevent the assessed value of these properties from increasing by more than 20% in a given year due to market forces. 

For example, if you have an eligible non-homestead property valued at $250,000 in 2023, the appraised value cannot increase beyond $300,000 in 2024. This will be highly beneficial for property owners who rely on having predictable cash flow and expenses and whose business may be impacted by sudden jumps in property taxes. It can also provide some relief for renters, who would otherwise have had to pay those passed-along increases.

3. Voters Can Pick Three of the ARB Reps in Their Counties

While this third change in the new legislation is making fewer headlines, it will be impactful. When property owners protest their property appraisals in the spring, their case may go before a full Appraisal Review Board (ARB). In that hearing, the property owner will present their argument, and the county appraiser will defend their valuation. The ARB determines the final property appraisal amount that then gets entered into the appraisal district role. 

If this legislation passes, districts with more than 75,000 residents will elect three citizens for every county. This increases overall voter input and can result in more fair and democratically founded hearings.

The package includes additional measures, including provisions for redirecting billions of Texas’s surplus revenue toward education expenses to keep the education funding level. Since school district taxes account for a large portion of property taxes (and are the largest individual levy in property tax bills), Texas legislators assigned over $12 billion of Texas’s surplus revenue toward school funding.

 However, many constituents are worried about education funding in future years that may not have a sufficient surplus. Legislators continue to consider future sources of educational funding, measures for protecting renters from passed-on property tax increases, and long-term tax increases for non-homesteaded properties.

A Closer Look: How These Changes Fit Into Property Tax Calculations

Each change in the property tax relief package will significantly change the process of determining property tax bills for residents and business owners across the state. Consider this overview of the process and where the changes fit into the whole landscape:

• November 7th: Texas voters will decide whether the property tax cuts are passed. As part of the package, both chambers passed House Joint Resolution 2, which allowed the property tax cuts to be put to a vote as a constitutional amendment. If the measures are passed, they will retroactively apply to 2023 property tax bills that go out in October.
• January 31st: Most homeowners will pay a reduced property tax bill if the package passes the vote. The excess money in their escrow accounts will significantly decrease property tax payment installments across 2024.
• Spring 2024: Local appraisal district offices will send out Notices of Appraised Value that consider the property valuation caps for homesteaded and non-homesteaded properties.
• May 2024: Eligible voters in counties with over 75,000 residents can vote on the ARB representatives that will hear protest hearings throughout the late spring and early summer.

This process will be tumultuous for appraisal districts, lenders who manage escrow accounts, county tax officials, and homeowners. Practicing due diligence will also be essential, not just staying informed about pending developments. For example, property owners will want to ensure they apply—or currently hold—all the eligible exemptions. You may also want to pay close attention to your notices for the next year to ensure the new rules are represented, your property value is accurate, and you’re receiving all due savings. You can even communicate with your lending service to get an estimate on your anticipated mortgage amounts during the transition.

Related: How Property Taxes Affect Mortgage Payments

Why These Changes Aren’t Enough to Guarantee Fair Property Tax Bills

Despite the significant savings, your property tax bill will likely still be higher than five or six years ago. The real estate market, which continues to face increased demand and supply levels that simply can’t keep pace, drove property values to new heights. Those numbers will continue to have a wide-reaching impact on your tax bills for years.

When you receive your Notice of Appraised Value every spring, there are two main numbers: your property’s appraised value (sans homestead cap) and the final value for tax purposes. While that second number is the most crucial because it’s what county tax officials will use to calculate your taxes, that first number is still essential because:

• It pushes up the value of comparable properties in your neighborhood: Prospective property owners may get priced out of your neighborhood.
• Those numbers, in turn, weigh on how your property value increases over time: If your homestead exemption lapses because your property transfers to a family member or because you retain it as a rental property after moving, that first number plays a much more significant role in your new property value and tax bill. Also, even with an exemption in place, a homesteaded property can still have a 10% increase in value every year. Protesting your property taxes is essential for paying fair taxes, whether you have an exemption or not. Remember: the circuit breaker provisions in the tax relief package creating a 20% cap for non-homestead properties may be revoked. It’s only a three-year pilot program.

What You Can Do: Protest Your Property Taxes

Texas residents have a constitutional right to protest their property taxes if they believe they are unfairly high and don’t represent the property’s actual value. This takes place in the spring. While it’s colloquially called ‘protesting your property taxes,’ homeowners are protesting their appraisal value, which is then used to calculate tax bills in the fall. If you believe the district appraisal is too high, you or a representative can file a protest notice and present a counter-valuation.

The appraisal district may accept your counteroffer, offer a compromise, or schedule a full hearing before the ARB. There, you can submit your arguments and evidence to try and secure a lower appraisal value. For example, the county may have appraised your home’s value at $450,000; you believe it should be $350,000. The ARB may rule that the value should be $400,000. That new $400,000 number becomes your appraisal’s first number. The homestead or non-homestead exemption cap is applied to it, and then your school district tax exemption is applied on top of that.

Home Tax Shield Is Here to Help You Navigate the New Property Tax Laws

Are you excited about the potential property tax savings but worried you’re still overpaying taxes? Home Tax Shield can help. We represent homeowners throughout the property tax protest process. Our team can file a protest notice on your belief, appraise your home’s value, gather evidence to support a lower counteroffer and represent you in the hearing in front of the ARB. Sign up to get ready for the 2024 tax year.