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Breakthrough Agreement: Texas House and Senate Forge Consensus on Property Tax Reduction, Resolving Prolonged Deadlock

The top Republicans in Texas have finally reached an agreement on how to reduce property taxes for Texans after months of wrangling.

The $18 billion deal between the Texas House and Senate would create a tax-credit pilot program for non-homesteaded properties and provide additional tax relief for the state’s 5.7 million homeowners in 2021. 

According to provisions released by state leaders on Monday, it would also lower taxes for small businesses and provide billions of dollars to school districts so that they can lower their tax rates.

Phelan’s office claims the bill will save homeowners and businesses a total of over $12 billion on their school property taxes, raise the homestead exemption from $40,000 to $100,000, and reduce the franchise tax for small businesses. All of these changes are expected to be enacted this week. 

There would also be a “circuit breaker” scheme for homes and businesses with values of less than $5 million. The pilot phase of the initiative would last for three years.

Phelan’s office stated in a statement that the new property tax relief law, the franchise tax relief bill, and the constitutional amendment needed to effect the reduction would be filed later Monday.

Larger Tax Reduction

Texas-House-And-Senate-Forge-Consensus-On-Property-Tax-Reduction-Resolving-Prolonged-Deadlock
The top Republicans in Texas have finally reached an agreement on how to reduce property taxes for Texans after months of wrangling.

The agreement ends a nearly seven-month impasse between the state’s top Republicans over the distribution of $12.3 billion in new tax breaks allocated by lawmakers at the beginning of the year.

Texas property owners pay some of the highest taxes in the country, but Republicans in Austin this year promised to reduce that burden by using a sizable portion of the state’s roughly $33 billion surplus.

The primary point of contention was the relative tax benefits for homeowners and businesses. Phelan and House members sought to give the full $12.3 billion to local school districts as a “tax rate compression” to reduce tax rates.

Source: ABC13

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