Proposition 4: Increased Property Tax Rebate Receives Thumbs Up in Texas. What You Need to Know!

Following the resounding approval of Proposition 4 in the November election, Texas residents will witness an increase in property tax rebates commencing next year.

Proposition 4 entails a permanent elevation of the homestead exemption concerning local school taxes, a measure anticipated to benefit approximately 5.7 million households.

Texas Property Tax Rebate: Proposition 4 Overview

Lieutenant Governor Dan Patrick expressed his appreciation for the approval via a tweet, hailing it as a significant triumph in the battle against property taxes, effective immediately this year.

In particular, Proposition 4, constituting an $18 billion property tax reduction initiative, encompasses the ensuing provisions:

• Enhancement of the general school district homestead exemption to $100,000 annually per household, up from $40,000.
• Empowerment of the legislature to establish a limit on the annual escalation in the assessed value of non-homestead real estate.
• Establishment of a provision to ensure that property tax rebates from Texas do not contribute toward the constitutional spending threshold.
• Delegation of authority to the legislature to institute four-year terms for members of the governing body of the appraisal entity in counties with populations exceeding 75,000.

Moreover, the initiative allocates $7.1 billion from the state’s surplus of $33 billion to school districts, facilitating their ability to reduce property tax rates.

Consequently, eligible homeowners can anticipate an annual tax reduction ranging from $750 to $1,500.

Notably, this legislation does not directly affect renters.

Overall, Proposition 4 will yield over $2,500 in tax reductions over the ensuing two years for an average homeowner, with seniors experiencing the most significant benefits.

It’s important to highlight that the alterations outlined in Proposition 4 will be reflected in the 2023 tax bills, payable in January.

Voters Support Proposition 4 for Tax Exemption Boost

Approximately 84% of voters supported Proposition 4, which enhances the homestead tax exemption and delivers property tax relief.

As Proposition 4 was presented as a comprehensive package, voters did not have the opportunity to individually select the amendments they favored.

Property tax reductions emerged as a prominent issue leading up to the Texas Legislative session.

Both the House and Senate engaged in protracted negotiations over several months to devise the most effective means of implementing these reductions.