The council voted 5-0 on June 21 to increase the town's homestead exemption from 2.5% to 5%. The exemption will go into effect for the 2021-22 fiscal year.
The homestead exemption applies only to a person's primary residence and does not extend to apartment dwellers or commercial property owners.
While council members agreed that the homestead exemption could be increased further, they said there were too many unresolved questions. Mayor Derek France said the council would consider another increase next year.
Interim Town Manager Debra Wallace said the town is also working on some additional tax cuts for homeowners but did not elaborate.
A homestead exemption lowers the property value used to calculate property taxes owed. In 2018, Flower Mound passed its first homestead exemption at 2.5% with a minimum exemption of $5,000 for all homeowners. Monday's vote doubles the exemption to help provide some property tax relief to homeowners.
For example, a Flower Mound resident who owns a home valued at $300,000 would pay property taxes on only $292,500 of that value under the town's 2.5% exemption. Under the 5% homestead exemption, that property value would decrease to $285,000 for calculating taxes owed to the town. The increased homestead exemption on a $300,000 home would mean nearly $33 a year less in property taxes paid to the town based on the current property tax rate.