Study Reveals Increasing Homestead Exemption Would Benefit ‘Select Few’

A new study from the Huffines Liberty Foundation finds renters won’t be benefiting from proposed changes to Texas’ property tax system—and for everyone else, it will be short-lived.

Authored by Bill Peacock, the study shows individuals who rent—whether apartments or single-family homes—pay a higher share of the property tax burden because those properties don’t qualify for homestead exemptions.

The state’s “homestead exemption” reduces the property tax burden by limiting how much of the appraised value can be included in the levy.

Many of the proposals currently being considered by the Texas Legislature seek to deal with the state’s skyrocketing property tax burden by increasing that homestead exemption. As Peacock notes in his study, “while property taxes for homeowners may grow at a slightly slower rate, renters and businesses receive no benefit at all from the homestead exemption.”

“Increasing the homestead exemption only benefits a select few Texans in a very short-lived way. Texans are tired of paying rent to the government and having the value of their businesses destroyed,” said Don Huffines, a former state senator and the organization’s president. “It’s time we realize the unimaginable prosperity for all Texans if we forgo raising the homestead exemption but rather put Texas on the path to eliminate school M&O property taxes, which would benefit all Texas homeowners, businesses, renters, and consumers.”

Instead, Huffines advocate for a five-pronged solution:

1. Limit state spending growth

2. Freeze school M&O property taxes

3. Use state budget surpluses to eliminate school M&O property taxes

4. Require voter approval for local governments to exceed the no-new-revenue tax rate

5. Enshrine property tax relief in the Texas Constitution

The full study, and its recommendations for actually reducing property tax burdens, can be found on the Huffines Liberty Foundation website.