Texas voters have approved two constitutional amendments that will bring significant property tax reductions for both homeowners and businesses. The measures, passed on Tuesday, aim to address longstanding concerns about high property taxes in the state.
The new laws increase the homestead exemption for school district taxes from $100,000 to $140,000. This means that a typical Texas homeowner with a $302,000 house could save around $490 each year. Seniors and people with disabilities are set to benefit even more due to an additional measure targeting those groups.
Businesses will also see relief after voters backed an amendment exempting up to $125,000 of business inventory from property taxes imposed by school districts, cities, and counties. Supporters say this change is particularly helpful for small and midsize companies facing higher valuations and tight profit margins.
“There is an absolute recognition of the need to provide property tax cuts for homeowners and business owners,” said state Sen. Paul Bettencourt, who led the legislative effort. “The public embraces the idea that increasing homestead exemptions is a way to keep people in their homes and to lower their property tax bills.”
These changes follow similar moves in other Republican-led states such as Iowa, Florida, and Georgia, which have sought ways to reduce property taxes as home values rise. States like California and Colorado are considering different solutions such as capping annual increases.
To make up for lost revenue from these exemptions, Texas has committed about $51 billion over two years using surplus funds. This money will help lower school district tax rates and replace funds lost due to the new exemptions.
However, some analysts caution that making these changes part of the state constitution could create challenges if future revenues decline. Unlike temporary adjustments, these breaks cannot be reversed without another statewide vote—potentially forcing lawmakers to cut spending elsewhere if budgets become tight.
Local governments may feel further impact since they must find ways to offset losses from exempted business inventories—either by raising rates or reducing services.
