City of Richardson proposes additional savings with senior tax exemption

City Manager Dan Johnson said the exemption also allows the city to be flexible in case of a "permanent and irreversible situation."

In looking to the future, city officials said they fear their current standards will be below the current 30% threshold by as early as next year. The current $100,000 exemption is estimated to generate less than a 30% tax benefit on the average value for the 2022-23 fiscal year, according to a presentation to council by Keith Dagen, director of finance for the city of Richardson. This estimate assumes a 5% growth in home value and a 2% increase in users.

City staff recommends increasing the exemption to $105,000 per household. This increase will provide a more than 31% estimated tax benefit on the average value of a senior's home for 2022-23. The $5,000 increase to the exemption would cut nearly $31 from tax bills for each participant.

At this estimate, seniors across the city would save more than $5.7 million in taxes with the proposed change totaling more than $270,000 of that.

For the 2021-22 fiscal year, the exemption was $100,000 per home. The exemption increased from $85,000 to $100,000 starting with fiscal year 2019-20.

The exemption amounted to more than 31% of the average market value of a senior’s home in 2021, according to the city presentation. Dagen said 30.5% of all residential homes in Richardson receive the exemption, and that total has grown by nearly 2% annually over the last five years.

Average market value of a senior’s home during 2021-22 increased by more than 2.5%, according to the presentation. At the city’s current tax rate, the current exemption equals a $615.16 reduction to the tax bill for each participating homeowner.

An increase in the exemption must be approved before July 1, 2022, to be effective for the 2022-23 fiscal year. The exemption is scheduled to be discussed for renewal by council at its Feb. 28 regular meeting.