Property Tax Relief in Texas: What to Know for 2025

Homeowners in the Lone Star State might remember receiving serious property tax breaks just two years ago.

But thanks to three Texas property tax bills hitting the ballot this fall, more relief could be on the way.

The proposed legislative package includes increased homestead exemptions as well as a property tax cut for businesses. If approved by voters in November, homeowners and business owners could receive $10 billion in tax relief funds.

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“Never before has the Texas Legislature allocated more funds to provide property tax relief than they did this session,” said Texas Gov. Greg Abbott in a press release. “I urge Texans to approve the new increases.”

However, not every Texan is on board with the financial relief, which would dip into budget surpluses despite future uncertainty surrounding federal funding. Plus, localities could foot the bill for the proposed tax cuts.

Here’s a breakdown of the property tax relief bills in Texas and how much you could save.

Texas property tax relief for homeowners

Part of the proposed tax relief in Texas includes cuts to property tax bills:

• This is a big deal because two years ago, the exemption amount more than doubled, from $40,000 to $100,000.
• The newly proposed Texas homestead exemption (Senate Bill 4) would further increase the amount to $140,000.
• As a result, 5.7 million homesteads in Texas could see a lower property tax bill.

Texas Lt. Gov. Dan Patrick, a major advocate of property tax relief, stated that homeowners under age 65 could see their school taxes cut by “almost 50%.” Raising the exemption amount would make $40,000 of a property’s taxable value exempt from property taxes.

But that’s not all — homeowners age 65 and older or those with disabilities could save even more under the new bills.

The Texas older adult homestead exemption

Not only would the state pick up the tab for homeowners under age 65, but those 65 and older would gain an extra benefit if the new property tax bills are approved by voters:

• The current homestead exemption for those age 65 and older or with disabilities is $110,000.
• That's an increase from $50,000 two years ago.
• Under Senate Bill 23, the exemption would jump to $160,000, or a total of $200,000 combined with Senate Bill 4.
• At least two million Texan households are expected to see reduced property tax bills if the proposed exemption is made law.

On average, the Texas Senate estimates that older or disabled homeowners could see annual savings of $454.30.

Combined with the first homestead exemption and school tax rate “compression” (more on that below), homeowners age 65 and older could receive $938.72 in property tax savings every year.

Texas business tax exemption

State businesses might also see a huge tax break under the new property tax bills through an increased exemption (House Bill 9).

Currently, Texas law allows businesses to exempt up to $2,500 of income-producing property from tax. This might include equipment such as computers, printers, or specialized vehicles.

The new law would boost the current exemption to $125,000, dramatically reducing the amount of property taxes paid by businesses on personal business property.

The initiative is expected to save business owners an average of $2,499 per year, according to a post on X by Sen. Paul Bettencourt (R-Houston), author and proponent of Texas property tax relief.

Texas tax cuts: Localities could bear the brunt

All tax relief bills come with a cost. The Texas property tax cuts would use “compression” to make up for lost revenue.

This means the state would provide more funding to school districts so schools can cut taxes for homeowners. But missed revenue at the county or municipal level would be the responsibility of local governments.

“If we have to raise [the rate] to recoup some of this lost money, it’s going to make us look like the bad guys,” McLennan County Commissioner Jim Smith told a local news outlet. He was specifically referring to the business tax exemption, which might force localities to raise rates to break even.

Others have raised concerns about increasing state-level spending amid federal budget uncertainties.

As the GOP’s so-called “Big, Beautiful Bill” has been signed into law, the Federal Reserve Bank of Dallas is reporting a softened, uncertain economy in Texas. Tariff policies coupled with federal spending cuts could complicate future budget planning in the Lone Star State.

Texas property tax relief bills on the November ballot

For a while, it looked as though Texas was about to get a fourth property tax bill on its ballot this November. The state House initially passed an amended version of Senate Bill 10, earning the proposal a spot in the state's special legislative session earlier this month.

If made law, large cities and counties would not have been able to raise property tax rates above 2.5% without voter approval. However, a compromise could not be struck on the final bill details in the state legislature. The Senate's second version of the bill was ultimately rejected by the state House, citing insufficient tax relief.

But the increased homestead exemptions and the business tax exemption were signed by Abbott in June. These bills are pending voter approval on November 4, 2025.

Stay tuned.

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