Texas Proposition 4, known as the Property Tax Changes and State Education Funding Amendment, was presented to Texas voters as a constitutional amendment proposed by the legislature on November 7, 2023. It received overwhelming approval, with 83% of voters in favor.
The primary aspects of Proposition 4 were:
In essence, Texas Proposition 4 is poised to notably influence property owners in the state:
Detailed Overview: Proposition 4 brought significant changes, such as enhancing the homestead tax exemption from $40,000 to $100,000, starting in the tax year commencing January 1, 2023. It also gave the legislature authority to set a cap on yearly appraisal growth for non-homestead real properties. This cap would consider either the property's recent market value or a maximum of 120% (or more) of its previous tax year’s appraised value. Additionally, the amendment permitted the legislature to define further criteria for this appraisal cap, effective from either the law's implementation or the start of the following year after property acquisition, whichever comes later, expiring on December 31, 2026.
Moreover, the amendment necessitated a reduction in property tax limits for senior or disabled homeowners with homesteads, calculated using a specific formula, starting in the 2023 tax year. In case of any adjustments in general school district homestead exemptions, the legislature is required to accordingly revise the tax caps for these homesteads. Proposition 4 also granted the legislature the authority to regulate appraisal entities in counties with populations over 75,000 and excluded ad valorem tax payments from the state's constitutional revenue cap.
Overall, Proposition 4 is mainly aimed at reducing property tax bills for many property owners, especially homeowners, and stabilizing property tax obligations for owners of non-homestead properties. The actual impact will vary based on individual circumstances like property value, exemption eligibility, and local tax rates.