Texas Proposition 4 Approved: Property Tax Relief is Official

Here's what the approval of Texas Proposition 4 means for homeowners and when they'll see lower property tax bills.

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After months of negotiation, Texas Gov. Greg Abbott signed a $12.7 billion property tax relief package, known as Proposition 4, into law in August. But the new law would have meant nothing if voters didn't approve the package, as they did in the Nov. 7 state elections. 

Here’s what Texas homeowners should know.

What is Proposition 4 in Texas? 

Now approved by voters, Proposition 4 will cut property taxes for Texas homeowners by increasing the state’s homestead exemption and through tax compression. (The idea of compression is to provide more money to school districts so schools can decrease property taxes.)

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Here’s how Texas will use the $12.7 billion to implement tax cuts since voters said "yes" to Proposition 4.

  • Approximately $6.5 billion will be used to increase the Texas homestead exemption from $40,000 to $100,000 ($110,000 for homeowners 65 and older).
  • Approximately $7.1 billion will be sent to school districts, which is meant to reduce the amount of school property taxes districts need to collect.

While Texas has already implemented tax compression, the compression outlined in Proposition 4 is estimated to save homeowners an additional 10.7 cents per $100 valuation ($107 per $100,000 valuation). 

When will the tax cuts take effect? Texas homeowners will see savings reflected on their 2023 tax bills, which are due in January 2024.

Texas election results

Texans voted on 14 constitutional amendments this past Election Day. Voters gave the okay to Proposition 4 and 12 other amendments on the ballot. Some of the approved changes include providing retired teachers with cost-of-living increases to their pension checks and requiring lawmakers to seek voter approval before implementing any new state taxes that are based on net worth or wealth.

Proposition 13 was the only amendment Texans disapproved of. If voters had said yes to this measure, the mandatory retirement age for state judges would have increased from 75 to 79. The minimum retirement age would have also increased, from 70 to 75.

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Katelyn Washington
Tax Writer

Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.