No More Fights Over Property Tax Relief

The proposed $18 billion property tax relief plan is on its way to Governor Greg Abbott’s desk after the final legislation passed in the House and Senate late Thursday evening. This marks the conclusion of what seemed like a never-ending debate over property tax cuts between House Speaker Dade Phelan and Lieutenant Governor Dan Patrick.

The plan includes $12.6 billion to reduce school property tax rates for home and business owners and $5.3 billion to increase the homestead exemption from $40,000 to $100,000 with additional relief for residents older than 65 or disabled.

The package also provides relief to small businesses through franchise tax cuts, creates newly elected positions for local appraisal boards and a new measure introduced earlier this week that lawmakers call a short-term “circuit breaker program.”

This temporary program, which expires in December 2026 per the legislation filed, does not operate like a traditional circuit breaker that considers income when calculating property tax.

Rather it places a 20 percent cap on appraisal increases for commercial and non-homestead properties valued at $5 million or below. Despite challenges to the program functioning more as an appraisal cap, legislators insist it is not one.

Senate Bill 2, the legislation outlining these property tax cut methods, and Senate Bill 3, the franchise tax relief proposal, were passed in the House on a majority vote. House Joint Resolution 2, the corresponding constitutional amendment, was also approved and will appear on Texas voters’ ballots during the upcoming November election.

The final day of hashing out property tax cuts did not come without friction, as House Democrats led by Representative John Bryant (D-Dallas) put a series of amendments up for consideration.

These addressed two of the top concerns from critics of the property tax relief plan: additional funding for public education and the lack of relief for renters. Last week, Democrat representatives announced their property tax cut plan, which included giving tenants cash refunds of up to 10 percent of their total amount of rent paid last year. However, this proposal failed, as did the amendments on the House floor Thursday.

Republicans claim that renters will benefit from the property tax relief plan as rental property owners will see more savings in property taxes, which may lead to less of an increase in their rent once in effect.

Legislators who criticized the plan for not touching on teacher pay raises — which were included in earlier legislation — were told that they would likely be addressed in the next special session.

The final property tax-related legislation to pass, HJR 2, was approved unanimously in the Senate. Shortly after, the House and Senate adjourned, ending the second special session.

The property tax relief plan is now pending Abbott’s approval, which will likely come in the following day as he has already announced his intent to sign off on the legislation.