Important 2025 Texas Legislative Session Update: New Changes in Property Tax Laws

A synopsis of how the latest changes to property tax exemptions is provided from a blog post from Gill Denson & Company, Tax Advisors:

Here’s what you need to know about recently proposed changes in property tax laws from the 89th Texas Legislative Session:

• SB 4 proposes an increase in the residence homestead exemption from $100,000 to $140,000.
• SB 23 proposes a $50,000 increase in the additional exemption for homeowners aged 65 or older or disabled, bringing it from $10,000 to $60,000.
• HB 9 addresses property tax exemptions for business personal property, raising the threshold from $2,500 to $125,000.

89th Texas Legislature Updates

The most recent Texas Legislature passed over 1,200 bills, several of which will impact Texas property owners. There are some significant benefits related to property tax relief, so we want to break down the most important ones and explain what to expect. Property taxes have been on the rise over the last few years, and legislation is one of the ways to help combat that. Now, these bills must first be approved by voters in November. After that, they are applicable as of their effective date.

SB 4: Homestead Exemption Increase

Currently, eligible Texas homeowners can receive a $100,000 general school district residence homestead exemption on their property taxes. Senate Bill 4 proposes increasing this amount to $140,000, which can equal hundreds or even thousands more in annual savings on property taxes. A constitutional amendment is necessary for this bill to go into effect, so it must be approved by voters first. If approved, this will apply to property tax years beginning on or after January 1, 2025.

SB 23: Additional Exemption for Seniors

Texas homeowners aged 65 and older or disabled are eligible for an additional exemption on their residence homestead. Senate Bill 23 calls to significantly increase this exemption from $10,000 to $60,000. Combined with the Texas Homestead Exemption, eligible seniors will receive a total of $200,000 in property tax exemptions. Same as the homestead exemption increase, this will apply to property tax years beginning on or after January 1, 2025, if approved.

HB 9: BPP Exemption Increase

Texas has taxes on business inventory, typically referred to as business personal property (BPP). Currently, the exemption threshold is only on BPP with an appraised value of $2,500 or less. House Bill 9 proposes exempting up to $125,000 of BPP from taxation by any taxing entity. That includes taxation by school districts, cities, and counties. This is meant to not only provide tax relief to business owners, but also to help stimulate economic growth. If approved by voters in November, this bill will take effect for tax years beginning on or after January 1, 2026.

It’s important to ensure you are receiving all possible tax exemptions that you are eligible for. Check with your local county appraisal district (CAD) to see what exemptions you currently have or could be eligible for.