McKinney City Council unanimously approved increasing the residential homestead exemption from $85,000 to $90,000 for residents age 65 and older as well as individuals with disabilities during a June 25 special meeting.

Council members also approved an ordinance that offers a 100% local property tax exemption for qualified child care facilities in the city, with council member Patrick Cloutier voting against the item. Council member Charlie Philips was absent for both votes.

The specifics

Chief Financial Officer Mark Holloway presented data showing the effect of increasing the exemption for people eligible and not eligible at a work session June 18.

According to a presentation at the work session, for every $5,000 increase in the homestead exemption, eligible homeowners will pay $21 less in taxes at the existing tax rate, and noneligible homeowners will pay $3.34 more in taxes given the tax rate. The city's tax rate is $0.427513 per $100 valuation, according to its website.

Homestead exemptions allow Texas homeowners to save money on their property tax bills by lowering the property value used to calculate property taxes owed. City Council members evaluated the potential increase following the presentation, with some members expressing support for a $5,000 increase.

“This [increase] roughly keeps the average assessed value of a ... home about the same dollar amount,” council member Patrick Cloutier said. “What we’re endeavoring to do is for the average senior [or] disabled homeowner, we’re endeavoring to keep it close to the same what they’re paying in city taxes."

The last homestead exemption increase for residents age 65 and over, and those with disabilities occurred in June 2023, with the exemption increasing from $80,000 to $85,000. The new exemption will go into effect Oct. 1 for fiscal year 2024-25, city documents state.

Also of note

Council’s approval of a tax exemption program will eliminate local property tax costs for qualified local child care facilities.

The program is a result of Texas voters approving a constitutional amendment to allow child care facilities to receive local property tax exemptions as part of last November's election.

According to a presentation at the meeting, eligible facilities must:
  • Be a licensed child care facility
  • Participate in the Texas Workforce Commission’s Texas Rising Stars program
  • Have at least 20% of enrolled students who receive subsidized child care through the TWC
Out of 17 McKinney child care facilities that participate in the Texas Rising Star program, four are eligible to receive the 100% local property tax exemption, Holloway said. The exemption would redistribute $19,000 of the tax levy, he said.

At the June 18 meeting, council member Justin Beller said the program would incentivize child care facilities to participate in the TWC program.

“You’re talking about $19,000 between four centers. ... It’s not a big [tax levy] to pass on,” Beller said. “It is ... incentivizing a facility to continue to accept the funds from the Texas Workforce Commission, which is not an easy thing to do because there are delays in that.”

Cloutier expressed concern for implementing a 100% exemption and recommended a 50% exemption at the June 25 meeting. He also noted few neighboring cities are implementing the exemption.

“I’m a little reluctant to be the canary in the coal mine on this,” Cloutier said of adopting the 100% tax exemption.

Learn more

For more information about property taxes in McKinney, visit