Texas takes a step forward in its property tax reduction project

Texas lawmakers reached an agreement to implement the largest property tax cut in Texas history. After several months of negotiations, the Texas Senate and House of Representatives reached an agreement on Monday.

The SB 2 and SB 3 bills were led by Republican Senator Paul Bettencourt. The project has the backing of Governor Greg Abbott, who promised on the campaign trail that he would lower property taxes. Once the bill is fully formalized, it will be sent to the governor's office to be signed into law.

The agreement reached by legislators involves an extraordinary budget package of $18 billion from the state government surplus. Of that money, more than $5 billion will go to ease the tax burden on the 5.7 million homeowners in the state of Texas. The measures will also benefit small business property owners and school districts.

Non-homestead properties valued at $5 million or less, including residential properties, such as tourist rental apartments, and commercial properties, will get a 20% circuit breaker on the appraised values over three years.

Depending on the profile of the homeowner, the bill also contemplates housing tax exemptions ranging from $40,000 to $100,000. Older taxpayers or homeowners with a disability would be eligible for extra bonuses. According to Republican Senator Paul Bettencourt, the tax relief package is estimated to reduce homeowners' taxes by 41.5%, an average of $1,373 per year.

"I promised during my campaign that the state would return to property taxpayers at least half of the largest budget surplus we have ever had. Today's agreement between the House and Senate is a step toward delivering on that promise." Governor Abbott said in a statement. "I look forward to this legislation reaching my desk so I can sign into law the largest property tax cut in Texas history."

These bills will be introduced as a joint resolution of the House and Senate and are expected to be approved by both chambers later this week. This is the first part of a much larger tax reduction project.