Austin (KXAN) – in the middle 17 proposed amendments The state constitution has two homestead property tax exemptions on the ballot this election cycle: Propositions 11 and 13.
Here’s what you need to know about these two items.
What do Propositions 11 and 13 address?
If a majority of Texans vote in favor of them, Propositions 11 and 13 would lower property taxes by increasing the allowable property tax exemption for homesteads.
Proposition 11 proposes to extend the homestead property tax exemption for elderly and disabled owners. The exemption will increase from $10,000 to $60,000 of the market value of a homestead.
Proposition 13 is a more far-reaching exemption. It would increase the exemption from school district property taxes from $100,000 to $140,000 of a homestead’s market value.
Arguments in favor of amendments
Props 11 and 13 were originally authored by State Senator Paul Bettencourt, R-Houston, into Senate Bills 4 and 23, which were proposed during the regular session earlier this year.
According to Bettencourt’s office, the exemption would save Texas’ 5.7 million homeowners about $484 a year, more than 2 million seniors $907 a year and small businesses $2,500 a year.
Combined, the two proposed amendments could help seniors and people with disabilities across Texas receive up to $200,000 in their homestead property tax exemption.
During legislative hearings, some experts estimated that if Proposition 11 is approved, it would allow 80% to 90% of seniors to pay $0 on property taxes.
Arguments against amendments
Passing Props 11 and 13 would cost schools an estimated $3 billion in lost revenue.
However, Bettencourt said the state would use its budget surplus to offset this cost.
Some are concerned that the property tax exemption will not reduce the tax burden on Texans, but instead shift it elsewhere.
Chandra Villanueva, director of budget and policy at Every Texan – a nonprofit that advocates for equality in many public policy topics – said that creating a permanent estate tax exemption in the state constitution would weaken a major source of state revenue.
She compares taxation in other states as a three-legged stool: income tax, property tax, and sales tax. There is no income tax in Texas.
“When you start avoiding property taxes over and over again, it puts more reliance on the sales tax. The sales tax is our most regressive tax and it’s the most unsustainable,” Villanueva said.
What qualifies as Grihasthashram?
In texasA person must own and occupy a property as their primary residence to qualify as a homestead.
To apply for the homestead tax exemption, ownership and occupancy must be completed by January 1 of the tax year for which they are applying for the exemption.
Settlements in the state can be classified as urban, rural or commercial settlements.
Urban residences are properties up to 10 acres within an urban subdivision. The property must have at least three municipal services such as water, sewer and electricity.
Rural homes are primary residences that are not located in a city or town. They are limited to 200 acres for a family or 100 acres for an individual.
Business homesteads are urban properties that function as a home but also have a business operated out of it. The tax exemption and creditor protection of a homestead protects individuals, not business entities such as corporations or LLCs.
