News & Updates

August 4, 2023
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Certified Public Accountants and Consultants
Texas' $18 Billion Dollar Property Tax Reform
On July 22, 2023, Texas Governor Greg Abbott signed off on a $18 billion dollar property tax reform package for the State of Texas. With the rising costs of property and school taxes over the past several years, this historic deal was solidified in an effort to provide relief to homeowners in reducing school and property taxes up to 40% or more. It also provides major tax savings for smaller businesses and other commercial properties, including franchise tax relief. 
What is included in the package?
The highlight of the bill is Senate Bill 2, which lowers the school property tax rate for all homeowners and businesses. $12.6 billion has been allocated to reduce the school property tax rate by 10.7 cents per $100 valuation for all homeowners and business properties.
 
Another key component is a $5.3 billion expansion on the Texas homestead exemption. Texas homeowners will notice the homestead exemption increase from $40,000 to $100,000 and $110,000 for disabled homeowners and those over 65. If a homeowner has lived in their home but has never gotten the homestead exemption, they will need to apply for it through their county appraisal district office. The exemption is normally retroactive for two years. Once a homeowner has applied, the exemption stands until the homeowner no longer lives in the residence. 
The bill also includes a major provision for “non-homestead” residential and commercial properties. The bill will limit the annual growth of the taxable value for all properties worth $5 million or less to no more than 20% under a pilot project. This includes second homes, vacation properties, rental houses or commercial retail or business properties.
Senate Bill 3 provides significant tax relief for small business owners by increasing the revenue threshold of no tax due for franchise taxes from $1.23 million to $2.47 million. 
Please note that Texas voters will need to cast their vote on the proposed bills mentioned above in the November 2023 election for this to take effect. If approved, the changes will be applied for the 2023 tax bills due in January 2024. 
We are dedicated to helping you stay informed as changes arise in the tax and accounting profession. Please let us know how we can help you better navigate your tax situation.

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GRIFFING & COMPANY, P.C.
One Sugar Creek Center Blvd., Suite 650
Sugar Land, TX 77478
(281) 491-8866 Fax (281) 491-8998