Texas leaders strike a deal on property tax relief for homeowners and businesses

CBS News

06-05-2025

Texas lawmakers have reached a deal on property tax relief that includes increasing homestead exemptions for homeowners and expanding exemptions for businesses, though concerns remain about a potential shift in the tax burden to homeowners.
Plano homeowner welcomes property tax relief
Kaleb White of Plano said with a young family, he welcomes any additional relief on his property taxes.
"I think it sounds great," said White. "Got two little kids. We're talking about growing our family even more. Anything like that is a huge help."
On Monday night, the office for Gov. Greg Abbott, R-Texas, posted on the platform "X" that he and Lt. Governor Dan Patrick, R-Texas, and Speaker Dustin Burrows, R-Lubbock, spent the day hammering out details on property tax relief for homeowners and businesses this session.
House Ways and Means Committee Chairman Morgan Meyer, R-University Park. and Chairman of the Senate Committee on Local Government Paul Bettencourt, R-Houston, announced a deal hours earlier Monday during their respective meetings.
"That means we've got home and business property tax relief on the way at the Texas legislature and that's a happy day," Bettencourt said.
The property tax relief deal
Under the deal, House Republicans will approve the Senate's bill that raises the homestead exemption on school property taxes from $100,000 to $140,000 this year.
Those over 65 and the disabled would receive an additional $60,000 this year, up from $10,000.
The state would continue replacing billions of dollars in property taxes with other state revenues to pay for public schools.
Also under the deal, Senate Republicans will approve the House's bill that will increase exemptions for business property taxes from $2,500 to $125,000 starting next year.
Various business groups gave a thumbs-up to the deal.
Jeff Burdett, the Texas Director of the National Federation of Independent Business, told the Senate committee that property tax is the number one issue he hears about.
"This is the number one issue that I hear from my small business owners when I talk to them around the state. Year after year, they get taxed on these things they already own and so this is really good, we appreciate it."
Glenn Hamer, the President & CEO of the Texas Association of Business, said, "The $125,000 level is a fair level, it is a meaningful level, as you stated, it probably will reduce business property taxes by $2,500."
The negative impact of property tax relief?
But, the Budget Manager for the city of Fort Worth, Brady Kirk, testified this week that reducing business property taxes will impact homeowners.
"The commercial part of the tax base, because of the exemption,n reduces their value, they become a smaller proportion of the tax base overall," said Kirk. "And in that way, shifts the tax burden."
When asked if that is over to homeowners, Kirk said, "Correct."
He also said it could affect the city's revenues and lead to the city raising its property taxes.
"We would have the authority to go to a higher tax rate, if that's what our leaders wanted," Kirk said.
Still, during testimony before Representative Meyer's committee, the Policy Director of the conservative Texas Public Policy Foundation pointed to the state's nearly $24 billion budget surplus.
"If I have one plea to the body today though, it is this: do more. Both because it's needed and it's possible."
The deal on property tax relief avoids an extended fight that took place two years ago between the House and Senate.
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