Since 2005, the city of Richardson has aimed to provide a property tax cut for citizens over age 65 that equals 30 percent of the average senior’s home value. To maintain that goal, this year staff is recommending raising the exemption from $85,000 to $100,000 per year—the largest increase since 2006.
While many cities in Texas freeze a resident’s annual property tax payment at the age of 65, Richardson opts for an exemption that lowers the taxable value of a senior’s home and is adjusted annually to address shifting property values.
Property tax payments for seniors have been on the rise for several years, Director of Finance Keith Dagen said in a Feb. 18 presentation to City Council. Since 2012, the average market home value for a senior in Richardson has increased by 60 percent, according to city documents. This trend is expected to continue, which is why the city is proposing a $15,000 increase to the senior exemption.
The average market value of a senior’s home in Richardson is expected to be $314,262 in 2019—a 10 percent year-over-year increase. If approved and property values increase by another 10 percent, seniors, on average, would pay $85 more for their city taxes.
The 100,000 exemption would save each eligible homeowner an average of $625 per year and cost the city $5.1 million annually, Dagen’s report showed.
About 30 percent of homes in Richardson are owned by seniors. Over the past five years, the percentage of seniors benefitting from of the over-65 property tax exemption has grown by about 2 percent each year. There are currently 8,227 homes that receive the exemption, Dagen said.
The average market value of a senior’s home would have to increase by 17 percent before the $100,000 exemption falls below the city’s 30-percent policy. Between fiscal years 2017 and 2018, the average home value for a senior in Richardson increased by 12.4 percent. According to City Manager Dan Johnson, the increase should keep Richardson within the 30-percent policy for the next two years.
If the increase is approved by March 11, the appraisal districts can incorporate the higher amount on notices mailed to residents around April 15, Dagen said. City Council is expected to vote on the change at its Feb. 25 meeting.