AUSTIN, Texas — The Texas Senate passed its $17.6 billion property tax plan during the first day of the 88th first special session.
Senate Bill 1 (SB 1) would increase the homestead exemption by $60,000 to $100,000 and add an additional 10 cents maximum compressed tax rate (MCR) on top of the existing 10.98 cents of SCP tax rate compression.
“This is the biggest property tax relief plan in the State’s history, $17.6 billion and it will substantially help all Texas taxpayers," said State Sen. Paul Bettencourt, author of SB 1 and SJR 1. “It will save homeowners $681.42 more per year, as it has a whopping $60,000 increase in the Homestead exemption for 5.72 million Texas homesteaders. That will help out to the tune of $20,442 over a 30-year mortgage.”
According to Bettencourt, homeowners could see $1,246 in savings in year one and $1,292 in savings in year two. Those who are 65 and disabled would see $1,416 in savings in year one and $1,462 in savings in year two.
Lt. Gov. Dan Patrick weighed in on the unanimous passage of SB 1 and Senate Joint Resolution 1 (SJR 1) saying, "I have been committed to fighting back against the wave of ever-increasing property taxes since before I held elected office. The combination of a substantial homestead exemption and property tax compression is a very powerful way to deliver serious property tax relief. I have been crystal-clear that taxpayers deserve to receive the largest property tax cut in Texas history, and SB 1 delivers on that promise sustainably and responsibly."
The Senate stated that SB 1 would take the 10 cents of MCR compression and combine that with the 10.98 cents of State Compression Percentage (SCP), which would lower the ISD Maintenance and Operation (M&O) tax rates close to 21 cents.
“This is a blockbuster plan for all Texas taxpayers as the M&O ISD property tax rate for schools will drop 21.8% in two years. So, everyone benefits, and voters will get to vote on the $60,000 homestead increases up to $100,000 November 7, 2023. If the voters approve, SB 1 will immediately lower 5.72 million homeowners tax bills,” Bettencourt said.
SJR 1 will still need approval by voters in November. According to a press release from the Senate, it "will save 5.72 million Texas homestead owners $1,245.93 this year when they see their next tax bill in the Fall by raising the Homestead Exemption to $100,000."