The estimated market value of a senior’s home in Richardson is about $310,334, which is up about 3% year over year, city Chief Financial Officer Kent Pfiel said at a Feb. 8 City Council meeting. There are currently 8,353 homeowners who receive the exemption, which represents more than 30% of all residential accounts, Pfiel said.
Under the city’s current tax rate, each $5,000 increment of the average senior’s home value translates to a reduction of about $31.26 in property taxes. For a home valued at $100,000, that amounts to about $625.16 in savings, Pfiel said.
Each year, council reviews the exemption to ensure it meets the city’s goal of maintaining a tax benefit of approximately 30% of the average senior home value. In 2019, City Council voted to increase the exemption from $85,000 to $100,000. No change was made to the exemption amount in 2020.
After reviewing last year’s certified values, Pfiel said the average senior in Richardson is actually receiving about a 32% tax benefit, giving the city some flexibility in maintaining the current exemption while also honoring its exemption goal.
The finance team recommended keeping the exemption where it is, noting the average market value would need to increase by 7% before the $100,000 exemption would fall below the city’s 30% goal.
Pfiel said he expects exempted city taxes will total $5.3 million in FY 2021-22, assuming a 5% growth in home value and 2% increase in the number of accounts. This is up slightly from $5.1 million exempted in FY 2020-21. The incremental cost to the city is $182,272, most of which is paid for through its general fund.
There is still a lot of uncertainty surrounding the effect of the pandemic on property values, Pfiel said. Difficulties around certifying values existed last year and could exist again this summer; therefore, it is fiscally prudent to keep the exemption flat, Pfiel said.
Because no change to the exemption was recommended, a council vote was not needed, City Manager Dan Johnson said. Offering this benefit is a good example of the city holding to a policy even during trying financial times, Mayor Paul Voelker said.
“We gladly do this discount as a city knowing that, unlike in a school situation where seniors typically don't use school services, seniors very much do use city services,” he said. “We know that, understand that and support the discount we give to seniors especially because so many of them ... are on fixed incomes; $100,000 can make a big, big difference in how much they pay in taxes.”