TEXAS LEGISLATIVE UPDATE:
Property Tax Relief & Reform (April 2025)
The Texas Legislature is one of only a few states that meets biennially (every other year). This session, there is overwhelming consensus to continue funding the 2023 school tax rate buydown, which triggered the historic statewide rate reductions we saw in 2023. After funding that continuation—along with other pre-existing relief measures—approximately $3.3 billion remains available for new property tax relief.
UPDATE 1: Competing Proposals from the House and Senate
The House Proposal: HB 8 and HB 9
- Adds another ~3.3 cents per $100 in school tax compression (2023’s compression was ~10.7 cents per $100).
- Increases the Business Personal Property (BPP) exemption from $2,500 to $250,000.
PPG’s Take:
The additional rate compression would clearly provide relief across the board. The proposed BPP exemption increase, however, has more complex implications. The state would only cover the lost revenue for school districts while other entities (city and counties) would be forced to recover lost value on the tax rolls via tax rate increases.
- For commercial tenants and industrial property owners, the change is likely a net positive.
- For owners of property with minimal BPP (like multifamily/apartments), the change could be a net negative due to potential rate increases.
The Senate Proposal: SB 4 and SB 32
- Raises the homestead exemption for primary residences from $100,000 to $140,000.
- For seniors, the exemption would rise to $150,000.
- Increase the Business Personal Property (BPP) exemption from $2,500 to $25,000
PPG’s Take:
While this provides no direct benefit to commercial owners, it’s expected that the state will fully fund the resulting tax relief. This should prevent any upward pressure on tax rates—a key difference from the House proposal.
UPDATE 2: Bill to Ban Appraisal District Lawsuits HB 3403 and SB 472
A Senator has introduced a bill that would eliminate appraisal districts’ ability to file lawsuits against property owners—whether initiating a new suit or filing a counterclaim. The bill faced little resistance in committee (outside of appraisal district attorneys) and is now headed to the Senate floor. If passed, it will move on to the House.
UPDATE 3: Other Potential Legislation
Both House and Senate members have filed a multitude of Property Tax related bills dealing with Equal and Uniform protections (preventing market value evidence in E&U cases), appeal timeline improvements, and appeal and hearing process improvements. Some of these have cleared committee and gained momentum but still face a long road to ratification.
PPG’s Closing Comments
Early signals suggest a more collaborative tone between the House and Senate this session, especially compared to 2023. Their competing proposals are likely to eventually be merged, with compromises on the final relief package. As of now, the most likely outcome includes:
- Some additional rate compression
- A modest increase in the homestead exemption
- An increase to the BPP exemption
Important Note:
Even if statewide rate compression is passed, that doesn’t guarantee a lower tax rate for a specific property in 2025. Compression lowers the maximum rate allowed, but if a jurisdiction sees falling assessed values, they may raise their rates within that new ceiling. In such cases, state-funded compression helps temper—but may not eliminate—a local year-over-year rate increase.
There remains a long way to go in the 2025 Texas Legislative session. We’ll be sure to continue to keep you updated as news develops and legislation moves forward.