City Council votes to double Austin's homestead tax exemption

Austin City Council members June 10 unanimously voted to double the city's homestead property tax exemption, one week after members approved a separate increase in exemptions for senior and disabled city homeowners.

Through the ordinance passed by council via consent, the city's previous 10% homestead tax exemption was lifted to 20%, meaning property owners will receive a 20% reduction on their appraised value if they reside in the home.

During earlier discussions of the percentage hike, several officials said their support for the measure was made possible this year by changes in state-level rules related to homestead exemptions that could have previously affected Austin's own revenue. The ordinance was sponsored by Mayor Steve Adler and cosponsored by Council Members Ann Kitchen, Paige Ellis, Pio Renteria, Leslie Pool and Mackenzie Kelly.

The item was originally up for approval last week, and its final reading was delayed following District 4 Council Member Greg Casar's ask to see a renter-focused ordinance added to accompany council's consideration of the homeowner-centered tax relief. Council on June 10 is also set to consider a Casar-sponsored ordinance that would shift $20 million in city emergency reserves to Austin's Relief of Emergency Needs for Tenants assistance program. Adler, Renteria and District 2 Council Member Vanessa Fuentes are cosponsors of that proposal.

"I know this doesn’t come, as with all things, some measure of concern especially with respect to renters. We had this discussion before; I think the impact is negligible, but in any event we’re doing focused things for renters also on the agenda today, and I know that was also important to members of the council. Spending decisions are hard; budget decisions are hard, but I think it’s good we’re doing everything we can help as many people as we can especially those on fixed incomes," Adler said following the homestead item's passage.

Casar last week also spoke about the percentage-based exemption's potential to provide high-value homeowners with the greatest benefit based on the scale of the new tax reduction on their properties. While he said he supported a flat-rate system that could grant variable exemptions to residents of all home values, such a system is not permitted in Texas, and Austin is limited to a percentage-based exemption capped at the 20% approved by council.

If a homeowner's calculated exemption at 20% would total less than $5,000, their exemption would be set at the full $5,000.