Austin homestead exemption increased to 10 percent following narrow council vote

After failing to increase property tax relief last year, Austin City Council on Thursday narrowly approved an increase to the homestead exemption from 8 percent to 10 percent for fiscal year 2018-19.

This means the homestead exemption, one of the lone property tax-relief tools available to council, will exempt 10 percent of a home’s appraised value from taxation. The move comes just before council begins drafting next year’s city budget.

The median home value for 2018-19 is projected at $329,951. The 10 percent homestead exemption would bring the taxable value down to $296,956. If the city kept its current tax rate at 43.33 cents per $100 of valuation, the two percent exemption increase would result in $28.59 of additional savings for the homeowner per year, or $2.38 per month. The homestead exemption's total savings for the year is about $143.

The move comes as property appraisal protests in Austin this year are expected to hit a record high.

The exemption is projected to result in a $4.8 million hit to the city’s tax revenue.

Council squeezed out a 7-4 approval of the increase, with council members Jimmy Flannigan, Delia Garza, Greg Casar and Kathie Tovo voting against the exemption. The increase needed seven votes to pass on all three readings, which was crucial Thursday in order to meet a state-mandated deadline.

Is it real relief?

District 8 Council Member Ellen Troxclair, the lone conservative voice on the dais, sponsored the item. Troxclair, who has been away on maternity leave for several months, has been an outspoken proponent of local tax relief.

“This is one thing that we can to do to show the middle class, the average homeowner, that we care about them and are listening to their pleas when they tell us they can’t afford to live in the city anymore,” Troxclair said. “It’s not a magic bullet, but people every day feel nickeled and dimed. They constantly see increases in property taxes and fees.”

However, members of the public and other council members asserted the exemption did not provide substantial relief except to wealthy homeowners and that the tax revenue hit would limit council’s ability to fund programs.

Mayor Steve Adler said the move could be revenue-neutral for the city if council increased next year’s property tax rate. That would result in commercial properties paying more while the typical homeowner still saved $18.79 in annual city property tax, or $1.57 per month.

Garza and Flannigan pointed out that multifamily properties are considered commercial and thus the property tax burden would be shifted onto renters. Adler said he disagreed.

Casar, holding up six quarters over the dais, said the savings were not that much for the homeowner, but the loss in revenue for the city was substantial.

“What we’re debating today is essentially six quarters a month for the median homeowner; in my district of course it is much lower,” Casar said. “I [recognize] every quarter helps. But if we are going to do something … I would rather invest those six quarters to generate several million dollars in revenue and address homelessness in our community.”

Adler and Troxclair vowed to get the homestead exemption to 20 percent when they campaigned in 2014. Council voted for a 6 percent exemption in 2015 and increased it to 8 percent in 2016. Council said the budget allowed no room for an increase when the issue came up in 2017.

Editors note: A previous version of the story did not include the total annual savings of the 10 percent homestead exemption.
By Christopher Neely
Christopher Neely is Community Impact's Austin City Hall reporter. A New Jersey native, Christopher moved to Austin in 2016 following years of community reporting along the Jersey Shore. His bylines have appeared in the Los Angeles Times, Baltimore Sun, USA Today and several other local outlets along the east coast.


The regional blood bank appealed for further donations in the wake of the June 12 shooting in downtown Austin. (Courtesy We Are Blood)
We Are Blood appeals for blood donations following weekend shooting in downtown Austin

The Central Texas nonprofit also said its blood supply remains depleted due to decreased donations through the COVID-19 pandemic.

Photo of a man holding robotic equipment
Tesla teams up with Austin Community College for manufacturing training and hiring program

The Tesla START program will hire and train ACC students to work with robotics and other advanced manufacturing equipment.

Austin City Council's Housing and Planning Committee met virtually June 15. (Screenshot via City of Austin)
Austin City Council members, city Realtors talk housing market increases and affordability

The median sale price of Austin homes surged past $500,000 through the first five months of 2021.

Izzy  is one of the 20 dogs in need of an emergency foster home. (Courtesy Austin Pets Alive)
Austin Pets Alive seeks emergency foster homes for dogs recovering from distemper

The Bastrop County Animal Shelter and Austin Pets Alive are seeking homes within the next 48 hours for 20 dogs facing euthanasia.

Community groups painted "Black Austin Matters" along three blocks of Congress Avenue in 2020. Juneteenth, an official city of Austin holiday as of 2020, commemorates the day Black residents of Texas found out they were free from slavery in 1865. (Community Impact Newspaper staff)
Juneteenth in Austin: Parade and fireworks information, other community events, city closures

The holiday commemorates the day Black enslaved residents of Texas were told they were free in Galveston in 1865.

The mid-June East Sixth Street shooting has prompted responses from city police, EMS and government officials. (Jack Flagler/Community Impact Newspaper)
Sixth Street fatal shooting leads to renewed discussions of public safety staffing, gun violence prevention in Austin

Increased police staffing, improved EMS availability, and state or federal action on gun violence prevention are among the proposals floated in the wake of the weekend shooting.

Plans to move forward with the design of a new Travis County women's jail have been postponed indefinitely. (Ben Thompson/Community Impact Newspaper)
Travis County pauses plans to build new women's jail

Commissioners voted unanimously to postpone any design or construction of new jail facilities for at least a year while staff re-evaluate the Travis County correctional system's needs.

Joseph Chacon, interim chief of the Austin Police Department, gives an update on Austin's recent move into the second phase of Proposition B camping ban enforcement June 15 alongside Homeless Strategy Officer Dianna Grey and City Manager Spencer Cronk. (Ben Thompson/Community Impact Newspaper)
Austin Proposition B enforcement shifts from education to warnings

Austin officials on June 15 provided an update on enforcement and outreach work by city staff and the Austin Police Department with the second phase of Proposition B camping ban enforcement now underway.

Candlewood Suites Northwest Austin
Williamson County declines lawsuit against Austin over Candlewood Suites saga—for now

Williamson County did not hold a vote to file a lawsuit against the city of Austin over the contentious Candlewood Suites property in Northwest Austin.

Photo of Moderna vaccine vials on a table
50% of Travis County residents fully vaccinated against COVID-19

Travis County has reached a milestone in COVID-19 vaccinations.

The Electric Reliability Council of Texas issued a call for Texans to conserve energy June 14. (Iain Oldman/Community Impact Newspaper)
ERCOT asks Texans to conserve energy with generation outages 2.5 times higher than normal

"This is unusual for this early in the summer season," said Woody Rickerson, ERCOT vice president of grid planning and operations, in a news release.