From the cover
State property tax plan could aid Montgomery County residents
What else?
The overview
If Proposition 4 passes, the homestead exemp- tion will be raised, and homeowners will pay reduced taxes to their local school districts . • ISD tax rates will decrease by $0.107. • The state will distribute $12.7 billion to schools. • For a $300,000 home, decreasing the school district tax rate by $0.107 would cut an average tax bill by $321. The plan also includes a nonhomestead appraisal cap , which would limit annual value increases for certain properties if Proposition 4 passes. • The value of property worth $5 million or less cannot increase by more than 20% year over year. • This applies to all nonhomestead property, such as second homes and commercial property. • Approximately 13 million properties will qualify. As part of the new law, SB 3 also amends the state business franchise tax , which all businesses currently pay based on individual circumstances. • Businesses that make less than $2.47 million annually will no longer have to pay the tax. • Roughly 67,000 small and midsize businesses will be exempt from the tax. • Collectively, qualifying business owners will save around $300,000 each year. While lawmakers widely supported the legis- lation, some in opposition fought for relief for renters . State Sen. Paul Bettencourt, R-Houston, argued that landlords who receive tax relief would pass the savings on to renters, but Dick Lavine, a senior fiscal analyst for the progressive advocacy group Every Texan, said the legislation does “nothing for [renters] at all.”
The $18 billion package includes two bills— Senate Bills 2 and 3—and a constitutional amendment. For the tax cuts to show up on this year’s tax bill, Texans must approve the constitutional amendment, Proposition 4, on the Nov. 7 ballot. Homeowners would also need to apply to receive the homestead exemption. The property tax relief comes as Montgomery County property owners are seeing value increases. Between 2019-23, the average market value of homesteaded properties— those who have applied for a homestead exemption—within Conroe ISD’s boundaries increased by 44.4%, according to the Montgomery Central Appraisal District.
With the state’s plan, Lt. Gov. Dan Patrick said the average homeowner would save $1,250-$1,450 on their 2023 tax bill while commercial property owners would see a 20% nonhomestead appraisal cap if the value of their property is less than $5 million. “If passed by voters this fall, Texas homestead exemptions [for school district taxes] will rise to $100,000; senior homeowners will be protected from being priced out of their home; the small-business exemption for the franchise tax will double; and Texas small businesses will be protected from excessive appraisal increases,” Gov. Greg Abbott said in an Aug. 9 news release after signing off on the plan.
Calculating tax bills
Taxable value The value of a property that can be taxed
Local tax rate Includes school district, county, utility district, etc.
Property tax bill
Current taxable value
Tax exemption (Value that cannot be taxed)
Average home value in Texas
Taxable value
New taxable value (pending voter approval) $331,000 $40,000
$291,000
Tax exemption (Value that cannot be taxed)
Average home value in Texas
Taxable value
$331,000
$100,000
$231,000
SOURCES: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS, TEXAS LEGISLATURE ONLINE/COMMUNITY IMPACT
Average market value of homesteaded properties
Why it matters
Montgomery ISD
Conroe ISD
Willis ISD
Rising home appraisals is a trend in Montgomery County. Between 2019-23, the average market value of homesteaded properties within the boundaries of Montgomery and Willis ISDs rose by 54.47% and 55.38%, respectively. Meanwhile, 93% of commercial properties in the county fall under the $5 million threshold for the nonhomestead appraisal cap, which is a three-year pilot plan, Metcalf said. “We took care of a lot of good people with that bill,” he said.
$503,363
$438,749
$500K $600K $400K $200K $300K $100K $0
$303,826
$325,857
$350,129
$225,340
Year:
2019
2020
2021
2022
2023
SOURCE: MONTGOMERY CENTRAL APPRAISAL DISTRICT/COMMUNITY IMPACT
16
COMMUNITYIMPACT.COM
Powered by FlippingBook