March 20, 2025

The 2025 Texas Legislature is currently working on property tax relief for Texans.

According to the Texas Tribune, three bills currently in the 2025 Texas Legislative session, House Bill 8, House Bill 9, and Senate Bill 4, could directly impact your taxes.

Both legislative chambers propose allocating $3 billion to school districts to reduce tax rates through "compression," intended to lower property taxes for homeowners and businesses.

House Bill 8

House Bill 8, introduced by State Representative Morgan Meyer (R-University Park), proposes dedicating another $2.8 billion specifically to further tax compression, which would provide greater relief.

The House's overall tax relief package targets reductions in school district taxes, representing the largest portion of property tax bills, and includes targeted tax reductions for businesses.

Representative Meyer, who chairs the House committee responsible for tax legislation, emphasized the importance of returning funds directly to Texans. According to Zillow, the average Texas home in 2024 was valued at about $302,000. Had the proposed House tax cuts been applied to last year's average school district tax rate, homeowners would have seen approximately $204, or roughly 10%, in savings on their school property taxes, based on calculations by the Texas Tribune.

House Bill 9

House Bill 9, also proposed by state Rep. Morgan Meyer, seeks to exempt up to $250,000 of business inventory (also known as business personal property) from taxation. Currently, Texas businesses face taxation on inventory valued above just $2,500. Due to the high cost and value of many pieces of dental equipment, this adds up fast for practices. An increase in the exemption amount would alleviate some taxation burden, allowing dental practice owners to reinvest the savings into their businesses.

Texas House Speaker Dustin Burrows highlighted this impact clearly, emphasizing that "raising the personal property tax exemption would be a monumental win for Texas businesses." The state will allocate approximately $700 million to school districts to offset the exemption's costs if enacted. However, it's worth mentioning that local entities might increase their tax rates slightly to balance these exemptions.

House Bills 8 and 9 were approved in committee and are moving out of committee for debate in the full House.

Senate Bill 4

Senate Bill 4, championed by state Sen. Paul Bettencourt, proposes raising the homestead exemption from $100,000 to $140,000. This would benefit homeowners' property taxes, meaning that although commercial real estate is unaffected, dentists who own their own homes (and all homeowners) would benefit.

Homeowners benefit more from the Senate's proposed tax-cut plan than the House version. According to calculations by the Tribune, when factoring in the Senate's existing proposal to reduce school tax rates by $3 billion, an individual owning a home valued at $302,000 in 2024 would save over $500 on their school taxes for that year.

The Texas Senate passed Senate Bill 4 in February, and the bill is awaiting a House vote.

We will continue monitoring these bills and keep you updated on their progress.

Not sure where to start? Contact us today.

References

https://www.texastribune.org/2025/03/03/texas-house-senate-property-taxes/