Texas Senate Advances Property Tax Relief –

What Homeowners Need to Know

Texans could soon see significant property tax relief thanks to a proposal making its way through the Texas Senate. On February 11, the Senate Local Government Committee advanced Senate Bill 4 (SB 4), which would raise the homestead exemption by $40,000—a move expected to save the average homeowner $363 per year on their property tax bill.

If approved, the bill will go before Texas voters in November as a constitutional amendment. Here’s what you need to know about this potential tax break and how it could impact homeowners in Buda, Austin, and across Texas.

What Is the Homestead Exemption and Why Does It Matter?

A homestead exemption reduces the taxable value of a homeowner’s primary residence, lowering the total amount of property taxes owed. SB 4 would increase the exemption:

🏡 From $100,000 to $140,000 for most homeowners
👵 From $110,000 to $150,000 for seniors and homeowners with disabilities

This means homeowners would be taxed on a smaller portion of their home’s value, resulting in lower property tax bills.

According to Senator Paul Bettencourt, the bill’s sponsor, this increase is part of a larger plan to reduce Texas’ high property tax burden. Texas currently ranks 10th in the nation for highest property taxes, with an average tax rate of 1.47%.

How Much Will Homeowners Save?

If passed, Texas homeowners could see nearly $500 in total annual savings when combined with school tax rate reductions also proposed by the Senate.

📉 $363/year – Savings from the increased homestead exemption
📉 $133/year – Savings from reduced school district tax rates

It’s important to note that this tax break only applies to school district taxes and will not impact city, county, or other local property taxes.

How Will This Impact Homeowners in Buda and Austin?

With the Austin housing market cooling and home prices stabilizing, this property tax cut could provide some relief for both existing homeowners and those looking to buy.

• Encouraging More Home Sales: Lower property tax burdens could make it easier for homeowners to sell, leading to more available inventory in the real estate market.
• Making Homeownership More Affordable: With mortgage rates still high, any savings on taxes can help make homeownership more accessible for first-time buyers.
• Helping Seniors Stay in Their Homes: Many retirees live on fixed incomes, and with rising costs, reducing property taxes could help them stay in their homes longer.

"A few hundred dollars in savings can have a big impact on whether someone decides to buy or sell a home," said Dixon Holman, a Texas Realtor who testified in support of the bill.

What’s Next?

Before this tax relief becomes official, SB 4 must pass both chambers of the Texas Legislature. If approved, the measure will go on the November ballot, where Texas voters will have the final say.

Lawmakers have set aside $3 billion in the 2026-27 state budget to fund the homestead exemption increase, as part of a continued effort to reduce Texas homeowners’ tax burden.

However, some experts warn that local governments could raise tax rates to offset revenue losses, meaning additional property tax reforms may be needed in the future.

Final Thoughts: What Should Homeowners Do Now?

While the tax cut isn’t official yet, now is the time to plan:

✅ If you’re a homeowner, make sure you’ve filed your homestead exemption to take advantage of any future savings.
✅ If you’re considering buying a home, factor in how property tax relief could make homeownership more affordable in the coming years.
✅ Stay informed – Keep an eye on November’s ballot, as Texas voters will ultimately decide if this tax relief becomes law.

Thinking about buying or selling a home in Buda or the Austin area? Staying ahead of these tax changes is crucial for making informed real estate decisions.📖

About Karlyn Ellis

Karlyn Ellis is a seasoned real estate broker with over 20 years of experience, proudly serving Buda, Texas, and surrounding areas. As the co-founder of Prosper Properties, Karlyn is dedicated to providing exceptional service and expert guidance, ensuring every client’s real estate journey is rewarding and stress-free.

With a passion for helping families find their perfect homes and a commitment to being the best Realtor in Buda, Texas, and beyond, Karlyn combines extensive industry knowledge with a personalized approach. Whether you’re buying, selling, or investing, Karlyn’s expertise makes her the trusted choice in the Texas real estate market.