The newly introduced Senate Bill 4 proposes an increase to the residence homestead exemption, raising it to an unprecedented $140,000—marking the largest exemption in Texas history.
This follows the substantial relief passed during the previous legislative session, which raised the exemption to $100,000. With SB 4, Texas voters will have the opportunity to approve a historic increase to $140,000.
To ensure that neither local taxpayers nor school districts bear the cost of the exemption increase, the bill includes a hold-harmless provision. This ensures the state will fully cover any funding shortfalls caused by the exemption increase, ensuring that school districts maintain crucial funding.
As Senator Bettencourt stated, “SB 4 will not only reduce property taxes for school districts, but the state will cover the costs, guaranteeing that no school district loses out on vital funding. This is a win for taxpayers and communities across Texas.”
Senator Bettencourt is joined by Senators Alvarado, Birdwell, Blanco, Campbell, Cook, Creighton, Eckhardt, Flores, Gutierrez, Hagenbuch, Hall, Hancock, A. Hinojosa, J. Hinojosa, Huffman, Hughes, King, Kolkhorst, Menendez, Middleton, Nichols, Parker, Paxton, Perry, Schwertner, Sparks, West, and Zaffirini, as joint authors of SB 4.
Key details include:
- “Our office estimates that the average Texas homestead could see an annual school property tax savings of $363.44, based on the statewide ISD average tax rate of $0.9086,” said Senator Bettencourt. “But that’s not the end of the savings!”
- SB 4 works alongside Senate Bill 1, the General Appropriations Act, which includes 6.8 cents of school district tax rate compression. This compression reduces the statewide average ISD tax rate from $0.9766 to $0.9086, resulting in an additional $133.13 in savings for the average homestead owner.
- When combined with the savings from SB 4, the total estimated annual tax reduction for Texas homeowners is $496.57.
Additionally, SB 4 continues to protect homeowners over the age of 65 and those with disabilities, ensuring that their homestead exemption values automatically adjust with rising property values and tax rate compression, maintaining ongoing tax relief for these groups.
This bill represents a significant step toward providing tax relief to homeowners while safeguarding school district funding.