Relief is coming for Texas property taxpayers, Katy-area State Rep. Mike Schofield told the Katy Business Association at its meeting last Thursday at The Club at Falcon Point.  Schofield represents TexasHouse District 132 which covers a large part of the Katy area.

Homeowners will benefit in two ways from the property tax relief bill recently passed by the Texas Legislature, Schofield said. First, the homestead exemption on each residence will rise from the current $40,000 to $100,000, meaning that the first $100,000 of a home’s value will not be subject to property tax. A home valued at $250,000 will be taxed as if it were worth $150,000, Schofield explained.

Second, school districts will be required to lower their tax rates, thereby lowering property tax bills, with the state making up the lost revenue so the district collects the same amount of money to pay for schools.

“It is fundamentally not the job of government to tax people out of their homes,” Schofield said, noting that several retirees told him they were considering moving to northern Arkansas, where the tax burden is lower.

Schofield also explained that for the first time, the new law provides a cap on appraisal increases for properties other than homesteads. The increase on small businesses, vacation homes or any other property worth $5 million or less will be capped at twenty percent.  He also pointed out that small business owners will benefit from a provision that raises the amount of gross revenue a business can earn without having to pay the state’s “franchise tax” from $1 million to $2.47 million. This prevent many small business from having to pay the tax at all, he said.

Several provisions of the new law require voter approval. The November election will include “Proposition 4,” which would permit the state to grant the property tax cuts.

Schofield also reported that many property owners were already taking advantage of a new state law allowing them to remove their property from the extraterritorial jurisdiction (ETJ) of a city, and that several landowners had already approached the city of Katy about leaving Houston’s ETJ and being annexed into Katy.