BEAUMONT, Texas — The Texas Senate and House reached an agreement Monday on a historic $18 billion property tax cut.
Texas Lt. Gov. Dan Patrick and House Speaker Dade Phelan issued a joint statement to announce the agreement on the proposed legislation that will be "the biggest property tax cut in Texas history."
The $18 billion tax cut will include:
- Over $12 billion to be spent on reducing the school property tax rate for all homeowners and business properties.
- A $100,000 homestead exemption for homeowners.
- A 20% circuit breaker on appraised values as a three-year pilot project for non-homesteaded properties, valued at $5 million and under, including residential and commercial properties.
- Savings on the franchise tax for small businesses and the creation of newly elected positions on local appraisal boards.
"Once the value is above 100,000, then it would start counting towards the percentage that they have to pay," said Lamar University Professor James Nelson.
The special session would have to vote on this agreement on Friday to see if it would become an amendment to the Texas constitution.
Southeast Texas Realtor Matthew Fischer explains how this could impact buyers looking in this market.
"By reducing their monthly mortgage payment, because you will have your principal and then your interest on your principal," he said. "Then, you have your insurance, and then your property taxes. So, if your property taxes get lower, your overall payment will get lower as well."
Along with this deal highlights a pilot program that would apply to certain businesses and homeowners.
"Called a circuit breaker that would regulate how much, a property assessment can go up in a given year. That would apply to property taxes on properties up to $5 million in value. So, that is something that would have value on businesses and home owners as well," Nelson said.
Both bills - the omnibus tax relief bill and the franchise tax relief bill - will originate in the Texas Senate and a constitutional amendment will be introduced in the House as a House Joint Resolution (HJR).
The legislation will be filed in both chambers on Monday, with both aiming to vote on the bills later this week.