No motion was made to increase the exemption during a June 17 McKinney City Council meeting. Council members moved on to the next item after reaching consensus to not increase the exemption.
McKinney Chief Financial Officer Mark Holloway, who presented the item to council, said if no motion was made the current homestead exemption would remain at $90,000.
The gist
The homestead exemption had been increased in each of the last three years. Last year in June, council members voted to increase the exemption by $5,000.
For every $5,000 increase, eligible homeowners would pay $21 less in taxes at the current rate, according to Holloway’s presentation. Non-eligible homeowners would pay $3.26 more in taxes at the current rate.
As the exemption currently stands, eligible homeowners save $374 in taxes, Holloway said. Non-eligible homeowners pay $56 more in taxes, according to the presentation.
The homestead exemption for homeowners older than 65 or disabled is the only exemption currently offered to McKinney residents. A homestead exemption removes part of the value from the assessed value of the owner’s property, according to Collin Central Appraisal District’s website.
“Which means you take the home value, you reduce it by $90k, and then levy a tax,” Holloway said.
What they’re saying
Mayor Pro Tem Geré Feltus said she remembered a year the council held off on increasing the homestead exemption because there was state legislation that would increase it at the state level.
“We’re in a similar position today,” she said.
Feltus referred to Senate Bill 4 and Senate Bill 23 which have passed through the Texas Legislature and have been signed by Gov. Greg Abbott. Texas voters will have final say on the measures in the November 2025 election.
SB 4 would raise the statewide homestead exemption from $100,000 to $140,000. SB 23 would give a $200,000 exemption to homeowners who are over 65 years old or have a disability. Both exemptions would apply only to taxes levied by public schools.
“When we’re looking at shifting tax burden this is one of the things that we sort of weigh,” she said. “We don’t want seniors to be caught in a position where they’re struggling every year as taxes increase because their home values are increasing.”
With that news flowing down from the state level, Feltus said she doesn’t see a need to increase the city’s current exemption.
“I don’t see the need for us right now given how much we need to operate the city with the amount of growth that we have, with the amount of roads that need to be constructed, with the number of city services that we have to provide as people are moving in,” she said.
Council member Patrick Cloutier said he agreed with Feltus’s position to leave the current exemption as is. He said he expects the statewide measures will be approved in November. The chances of both ballot measures not being approved are “slim and none,” he said.
“This is going to reduce the taxes for every homeowner and even more so for every over-65 and disabled [homeowner],” Cloutier said.
Also of note
Council member Justin Beller asked Holloway if there was a chance the city tax rate could be lowered for the next fiscal year. Holloway said a lower tax rate was “in the cards” based on preliminary figures from the Collin Central Appraisal District.
Council member Michael Jones said it was time the city explored a homestead exemption for all homeowners in McKinney. He inquired about doing a “deep dive” into what that would look like during a future meeting.
Holloway said that can be discussed with the council after this budget season ends and before the next season begins.
