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Austin-area homeowners should expect lower property tax bills, county office says

The tan roofs of three residential buildings jut out from the right with the Little Woodrow's sign seen in the background in front of more residential brick buildings.
Gabriel C. Pérez
/
KUT
The Travis County tax assessor-collector attributed the anticipated savings to a state proposition passed in the November election.

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When Josh Hostetler looked up his 2023 property tax dues, he felt an emotion not often coupled with the opening of bills. Joy.

“I’m happy,” he said. “I like paying less property taxes.”

In Hostetler’s case, about $447 less. It’s the largest and only second decline in his annual property tax bill since he bought a South Austin home in 2017. In a city where home values have risen incredibly in the past decade and in a state where landowners are taxed at some of the highest rates in the country, property tax bills in Austin typically know no direction but up.

But this year is different. According to an analysis by the local tax office, the average property tax bill for Travis County homeowners who live in their homes is $658 less than the year before.

Homeowners who receive discounts on their property taxes because they are seniors or have a disability may see an even greater drop. The tax office said the average bill this year for people who have filed senior or disability exemptions is $1,351 less than in 2022.

“This is the most significant property tax reduction for most people in at least a decade,” Bruce Elfant, the Travis County tax assessor-collector, said.

Elfant attributed the anticipated savings to a proposition from state lawmakers passed by Texans at the ballot box in November. Voters approved a greater homestead exemption for school taxes, meaning a larger amount of an owner’s home value is no longer subject to being taxed to pay for schools. The proposition also authorized the state to use $7.1 billion to pay down the tax rates of public school districts, in a move to help shoulder the cost to taxpayers of funding education.

But it’s not clear that homeowners who have yet to pay off their mortgages will see a property tax reduction reflected in their monthly bills. Typically, property taxes, insurance and a home loan are bundled into one monthly payment. Owing fewer property taxes could mean a lower monthly mortgage bill.

Yet rising property insurance rates could offset any savings. According to The Texas Tribune, insurance providers in the state raised rates this year by 22%.

“There is concern that those premiums are increasing so significantly that in Texas part of what is saved through property tax reduction can be eaten up, or in some cases perhaps exceeded by increases in the property insurance,” said John Fleming, general counsel for the Texas Mortgage Bankers Association, an organization that represents mortgage lenders in the state.

Rich Johnson, director of communications for the Insurance Council of Texas, said rates have increased significantly in the past several years in response to the rising cost of materials and labor, coupled with a larger number of filed claims. But, he said, he expects the rise in rates to slow in 2024.

“What we expect going into the next year is a little bit of relief,” Johnson told KUT. “Everybody is predicting about single-digit increases, so 10% or below.”

Audrey McGlinchy is KUT's housing reporter. She focuses on affordable housing solutions, renters’ rights and the battles over zoning. Got a tip? Email her at audrey@kut.org. Follow her on Twitter @AKMcGlinchy.
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