The $18 billion property tax cut in Texas is now a reality!
Hello, future Texans! Big news is afoot. In the November 2023 Elections, The Lone Star State voters have approved a game-changing property tax cut. This isn’t just a small-scale modification but a historic one with grand implications for all, especially for first-time homebuyers like you.
Let’s delve into the nitty-gritty of this tax cut and how it’s set to influence your home-owning experience in the Dallas area.
What factors contribute to the implementation of the Texas Property Tax Cut?
Texas is undeniably an economic powerhouse, demonstrated by its impressive $33 billion surplus in the state budget. This remarkable achievement speaks volumes about the financial strength and prosperity of the Lone Star State.
To gain a thorough understanding of how the extraordinary property tax reductions came about, I encourage you to explore the official press release published by the Governor of Texas. It offers a detailed analysis of the specifics that are sure to captivate your interest.
Governor Abbott Signs Largest Property Tax Cut In Texas History
https://gov.texas.gov/news/post/governor-abbott-signs-largest-property-tax-cut-in-texas-history
What is the property tax in Texas?
First of all, Texas has NO STATE PROPERTY TAX. Property taxes are assessed and collected at the local level, primarily by county appraisal district taxing units. These taxes play a crucial role in generating revenue for local governments to support a wide range of essential services, such as education, infrastructure development, public safety, and more. They are a vital source of funding that enables communities to thrive and provide necessary amenities and resources to their residents.
What does the property Tax in Texas include?
Taxing units, also known as entities, encompass a variety of organizations such as cities, schools, hospitals, water districts, and special districts (muds & pids). These local taxing entities play a crucial role in determining the required funding to provide essential public services. Property tax rates are then established based on the budgets set forth by these taxing entities.
Can homeowners reduce or avoid paying property tax in Texas?
All property is subject to local taxation unless exempted by state or federal law, either in whole or in part. Full exemptions can be granted for public properties or properties owned by qualifying organizations such as churches, schools, or charitable organizations.
Examples of Property Tax Exemptions in Texas.
Examples of partial exemptions include the homestead exemption, exemptions for individuals over the age of sixty-five, and exemptions for disabled veterans.
These partial exemptions serve to reduce the taxable value of qualifying property while maintaining the original intent of the taxation system.
What does the Historic $18 Billion Property Tax Cut mean for homeowners?
Through the constitutional amendment, school districts will receive $7.1 billion to alleviate their tax burden by substituting local revenues with state funds, a process referred to as “compression” by lawmakers. As a result, the tax rates utilized by school districts to cover operational expenses, including teacher salaries, will decrease by 10.7 cents per $100 of property value.
The constitutional amendment also raises the homestead exemption from $40,000 to $100,000, which means an additional $60,000 of a property’s taxable value will be exempt from property taxes.
The homestead exemption will be $110,000 for Texas homeowners 65 and older.
Homeowners with disabilities will also be eligible for the $110,000 exemption, regardless of age.
Approximately 5.7 million Texas homeowners will qualify for the homestead exemption!
Here’s an illustration of how the property tax cuts will impact the property tax situation in Princeton, TX which is located in Collin County.
Princeton, TX Property Tax Rates – (FISCAL YEAR 2022)
City: 0.534543
Other Entities: Princeton ISD 1.442900
Collin County 0.152443
Collin College 0.081220
Total of all entity tax rates (per $100 assessed value) 2.211106
Property tax on a $350,000 home 6,854.43 (with $40,000 homestead exemption)
Princeton, TX Property Tax Rates – (FISCAL YEAR 2023)
City: 0.440226
Other Entities:
Princeton ISD 1.257500
Collin County 0.149343
Collin College 0.081220
Total of all entity tax rates (per $100 assessed value) 1.928289
Property tax on a $350,000 home is $ 4,820.73 (with $100,000 homestead exemption)
See Collin Central Appraisal District Tax Rates and Exemptions
https://www.collincad.org/ccad/reports/rates_exemptions.php
When will the Tax Cut come into effect?
You must be eager to know when these tax cuts will take effect. The good news is they will be applied to landowners’ 2023 tax bill, which means you can expect more than $2,500 in tax savings over the next two years if you’re a typical Texas homeowner.
How the Tax cuts benefit First-time homebuyers in the Dallas area?
If you’re a first-time homebuyer in Dallas, you’re in luck! The property tax cuts come with some sweet advantages for you. The increase in the homestead exemption means you’ll be able to save big bucks, making homeownership way more affordable. And let’s be real, saving money is always a win!
And here’s the cherry on top: these property tax cuts might also have a ripple effect on the real estate market. More available properties and a livelier market? That means you’ll have more options to choose from. How’s that for a win-win?
But hey, I get it. Home buying can be a bit tricky, especially if you’re a first-timer. That’s where I come in! As a local Dallas area Realtor, I’m here to guide you through the process and help you make sense of all the potential savings and benefits these tax cuts bring to your home buying experience in Dallas. So, let’s chat!
Moving to Texas
With these property tax cuts, Texas, and specifically the Dallas area, is becoming an increasingly attractive place for new homebuyers. The real estate market here is vibrant and inviting, with the tax cuts adding another layer of appeal. Need help navigating this market? As your friendly local realtor, I’m here to make your move to the Dallas area as smooth as possible.
Conclusion
The property tax cut in Texas is a game-changer, bringing with it substantial savings for homeowners. For first-time homebuyers in Dallas, like yourself, this is an opportune time to stake your claim in the Lone Star State. Ready to start your home-buying journey? Reach out to me, and let’s turn your Texas dream into reality!
Looking to buy a home in the Dallas-Fort Worth area?
Call/Text 214.940.8149
As your Realtor®, I want to help you find the perfect home, whether it’s a new construction home or an existing one. If you’re a first time homebuyer, or relocating to the Dallas area and need help finding a new home I’ll guide you through the process and help find the best home for your needs.
