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Better Know Your Ballot: The Proposition 1 Homestead Exemption

KUT News
Proposition 1 will raise the state's residential homestead exemption used to calculate school property taxes from $15,000 to $25,000.

While the presidential election is getting a lot of headlines, that’s not until next year. But one of the seven amendments to the state constitution on the ballot this November could raise the state's homestead exemption and lighten the property tax load for Texas homeowners.

It's a fairly simple amendment. If passed, it would raise the residential homestead exemption used to calculate school property taxes from $15,000 to $25,000. Sen. Jane Nelson, the Senate’s budget writer, pushed for an increased homestead exemption during this year's legislative session

“This is the easiest best mechanism and, quite honestly, if homeowners have money back in their pockets, they're probably going to use it in a way that's going to impact, positively impact, everybody,” Nelson said.

Groups that opposed this proposition during the legislative session point out that not everyone will actually benefit. Renters are an obvious example, but there's also debate over how much savings homeowners will see.  The exemption increase would knock about $120 off the property tax bill of a $200,000 home. It's not a lot and, since Texas is a rapidly growing state with rapidly rising property values, some homeowners will likely still see an increase in their property tax bill next year.

The proposition also has an additional benefit to those looking to buy a home in the future: It would constitutionally prohibit a real estate transfer tax, even though Texas currently doesn't have one.

Thirty-seven states have this kind of tax on home sales to pay for things like affordable housing, green space and new schools in fast-growing districts.

“Yeah, we really haven't seen at the local level this type of activity, where local officials want to do this,” says Daniel Gonzalez of the Texas Association of Realtors. “What we have seen, though, [that] there are some legislators who do propose some small transfer tax type legislation.”
Election Day is Nov. 3 and early voting starts Oct. 19.

This is part one in KUT’s Better Know Your Ballot series, which looks to to explain all seven constitutional amendments that Texas voters will see on the ballot this November.

Ben Philpott is the Managing Editor for KUT. Got a tip? Email him at Follow him on Twitter @BenPhilpottKUT.
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