Keller raises homestead exemption to state maximum

Keller City Council voted June 15 to raise the city’s homestead exemption from 14% to 20%, the state maximum.

The move will reduce a portion of what Keller residents must pay in property taxes to the city. Mayor Armin Mizani said it is part of an effort to shift the city’s financial burden away from residents and toward sales tax revenue.

“With the appraisal values, as they continue to rise, literally people are being priced out of their homes,” Mizani said. “We, as a city council, have the responsibility to do what we can.”

A homestead exemption is a discount that taxing entities, such as the city of Keller, can offer for property owners. Homeowners can apply to their appraisal district for a residence homestead exemption to remove a percent of their property’s value from being taxed, according to the Texas Comptroller of Public Accounts. The homestead exemption only applies to a person’s primary residence.

According to city documents, Keller approved a 1% homestead exemption rate in 1986. The 1% exemption rate was in place until 2016, when it was raised to 4%. The rate was raised every year after that, up to 14% in 2020.

The city tax accounts for about 17% of each resident’s property tax bill, according to a June 15 presentation by Keller Director of Finance Aaron Rector. However, the new exemption will reduce the average appraisal value for a Keller home from $373,725, with the 14% exemption, to $347,651.

City Manager Mark Hafner said that this move will provide relief to residents as home values increase.

“We will have, probably, a difficult time touching the tax rate. But as we see, the biggest impact on the increase of the home values lies on the homeowner,” Hafner said. “And what this will do is give us the most impact to the homeowner right now.”