Texas Voters Approve Proposition 4: A Historic Property Tax Cuts

In a landmark decision, Texas voters have overwhelmingly approved Proposition 4, a historic property tax relief package. This $13 billion measure aims to significantly reduce property taxes for homeowners across the state. Let's delve into what Proposition 4 entails, the election results, and its potential impact on Texas residents.

What is Proposition 4?

Proposition 4 encompasses a multifaceted approach to property tax reform, addressing key aspects to alleviate the burden on homeowners. The plan includes a temporary limit on the appraisal values of non-homestead properties, ensuring that the taxable value does not increase by more than 20% for three years. This provision applies to properties valued at $5 million or less.

Key Components of Proposition 4

1. Homestead Exemption Increase:

One of the cornerstones of Proposition 4 is the substantial increase in the homestead exemption on school district taxes. Previously capped at $40,000, the exemption has now been elevated to an impressive $100,000. This move is expected to bring about substantial savings for the average homeowner, estimated at around $1,200 annually. Additionally, it will eliminate school M&O (maintenance and operations) taxes for homeowners in nearly 400 school districts whose home values are $100,000 or less.

2. Tax Compression:

Recognizing the need to allocate funds for the $18 billion plan, Proposition 4 introduces measures for tax rate compression. This allows the state to fund the tax relief without surpassing the spending cap imposed by the Texas Constitution. The plan seeks to strike a balance between tax relief for homeowners and the financial needs of the state.

3. Appraisal Value Limit:

For non-homestead properties valued at $5 million or less, a temporary limit on appraisal values is imposed. The taxable value of such properties cannot increase by more than 20% for three years.

4. Seniors and Disabled Individuals:

To rectify previous oversights, Proposition 4 includes provisions ensuring that seniors and the disabled benefit from the tax cut. This correction addresses issues from a previous tax cut for the elderly and disabled, ensuring that all eligible individuals receive the intended savings.

5. Expanded Appraisal District Boards:

In a move to enhance governance, Proposition 4 expands the appraisal district board of directors in populous counties. Counties with a population exceeding 75,000 can now elect three members to the board, who will serve alongside five appointed members.

Election Results

Proposition 4 received resounding support from Texas voters, with nearly 84% in favor of the measure. This overwhelming approval demonstrates the urgency and importance Texans place on property tax relief.

Impact on Homeowners' Property Tax

The passing of Proposition 4 signifies the most substantial property tax cut in Texas history. Homeowners can anticipate tangible benefits, including increased savings and a reduced property tax burden. The average homeowner is expected to see a yearly windfall of $750 to $1,500.

Implementation Timeline

Texans can expect to see the impact of Proposition 4 on their 2023 tax bills, due in January 2024. The changes include a higher homestead exemption and additional tax compression, collectively resulting in significant savings for homeowners.

Proposition 4's approval marks a significant victory for Texas homeowners, signaling a considerable reduction in property taxes. The implementation of this historic property tax relief plan reflects the responsiveness of state governance to citizens' concerns, offering substantial financial benefits to property owners statewide.