Texas lawmakers have sent a new property tax reduction plan to Governor Greg Abbott, who's expected to approve it.
This November, Texans will vote on whether to make these tax cuts a reality. The changes include bigger breaks for homeowners and businesses.
Why This Matters
With property taxes on the rise, many people have felt the pinch as the cost of homes has soared. The new proposals aim to ease this burden.
These changes are part of a bigger conversation happening across the US, where some states are thinking about reducing or completely removing property taxes.
But cutting taxes could lead to less money for important services like schools and hospitals.
Details of the Texas Proposal
The proposed laws would increase the part of a home's value that can't be taxed by schools from $100,000 to $140,000 for most homeowners.
For seniors and those with disabilities, this non-taxable amount could go up to $200,000, which means anyone whose home is worth this much or less wouldn't pay any school property taxes.
Businesses would also get bigger tax breaks. The cap on how much of a business's property value can be tax-free will rise greatly from $2,500 to $125,000.
This means a lot more of a business's equipment or inventory would not be taxed.
State Budget and Future Concerns
To support these tax cuts, Texas plans to use about $51 billion over the next two years, which is a quarter of the state's total budget.
They need to make sure schools get enough funding even with lower property taxes. Some politicians are worried whether Texas can afford these cuts long-term, especially if the economy gets worse.
No Help for Renters
The current proposals don't offer any tax relief to renters. In Texas, there are approximately 12 million renters, and many spend a big chunk of their income on housing and utilities.
Check out: Understanding Rental Assistance: A Comprehensive Guide
A Wider Trend
Texas isn't the only state looking at reducing property taxes. Other states like Florida and Illinois are having similar discussions.
Although reducing property taxes could help homeowners, especially seniors, there are worries that it could reduce money available for essential services.
What's Next
Governor Abbott is likely to sign off on these measures. Texas voters will then have their say in November. If they vote in favor, the new tax breaks will start in the next tax year.
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Check out: The Most Affordable Cities to Buy a Home in the U.S.
