Texas Approves Major Property Tax Relief Plan For Homeowners And Businesses

Key Takeaways: 

• Expanded Exemptions for Relief: Homestead and business exemptions are being significantly increased, which could reshape how homeowners and businesses manage their tax obligations.
• 2026 Implementation Pending Vote: Major reforms won’t take effect until January 2026, pending voter approval in the November 2025 general election.
• Immediate Action Still Possible: Property owners can still lower their 2025 tax bills by filing a protest, making this a crucial window for immediate financial relief.

As one of Texas’ leading voices in property tax advocacy and reduction, Icon has proudly helped thousands of property owners challenge inaccurate assessments and keep more of what’s theirs. Our data-driven approach, industry expertise, and results-focused mindset have made us a trusted name for homeowners, investors, and business owners across the state.

Texas property tax rates have long been among the highest in the country—and with surging home values and rising commercial assessments, the pressure on property owners has only intensified. But in a long-awaited move, Texas lawmakers have finalized a sweeping property tax relief package aimed at bringing real, lasting change. The legislation doesn’t just adjust numbers—it restructures how taxes are calculated, capped, and contested. With meaningful reforms for both residential and commercial properties, this could signal the beginning of a fairer, more stable tax system for all Texans.

In this piece, we’ll break down the core elements of Texas’ new property tax relief plan—what’s included, when it takes effect, and how you can take action right now.

A Closer Look At House Bill 9, Senate Bill 4, And Senate Bill 23

Texas’ latest property tax relief initiative is built on the foundation of three significant legislative actions—House Bill 9, Senate Bill 4, and Senate Bill 23. Each bill addresses a unique aspect of the property tax system, collectively forming a comprehensive approach to easing the tax burden for both homeowners and businesses across the state.

House Bill 9: Business Property Tax Exemption Increases

House Bill 9 delivers targeted relief for commercial property owners and small to mid-sized businesses. One of its most impactful measures is the increase of the business personal property exemption from $2,500 to $125,000. This change means many businesses will no longer pay taxes on items such as office equipment, machinery, and furniture under the new threshold. Additionally, the bill utilizes state budget surpluses to assist school districts in lowering their tax rates without compromising funding, thereby creating a dual benefit for business owners and local homeowners alike.

Senate Bill 4: Increased Homestead Exemptions

Focusing on the residential side, Senate Bill 4 significantly boosts the mandatory homestead exemption for school district taxes from $40,000 to $100,000. This enhancement allows homeowners to shield a greater portion of their home’s value from taxation, directly resulting in smaller tax bills. Furthermore, the bill provides additional exemption increases for Texans aged 65 and older and for those living with disabilities, offering stronger financial protection to residents who often face fixed or limited incomes.

Senate Bill 23: Stability For Seniors And Commercial Owners

Senate Bill 23 extends support even further by raising the school district exemption for seniors and disabled Texans to $200,000. For commercial property owners, it introduces new appraisal regulations and caps, designed to curb sudden, steep increases in assessed value. These adjustments aim to deliver more predictable tax bills and promote long-term stability across non-residential sectors.

What The Texas Property Tax Relief Package Means For You

The passage of Texas’ new property tax relief package marks a significant shift in how property taxes are calculated and managed. With property tax bills rising sharply in recent years—county taxes alone jumped by 10.4% in 2024—this legislation delivers meaningful financial reprieve to homeowners and businesses alike. Here’s how the changes directly affect you.

Larger Homestead Exemptions For Homeowners

Homeowners will benefit from an expanded homestead exemption. The increase from $100,000 to $140,000 in the school district exemption means a larger portion of a home’s value is shielded from taxation. For many, this translates into hundreds of dollars in annual savings, all without needing to file a formal protest.

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Reduced School Tax Rates

Another key component is tax rate compression for school districts. This measure reduces the amount that school districts can tax per dollar of property value. The state steps in to fill the funding gap, ensuring schools remain financially stable while homeowners enjoy a lighter tax load.

Caps On Appraisal Increases

To address unpredictable spikes in assessed property values, the legislation introduces limits on how much a property’s appraised value can increase each year. This creates greater transparency and predictability around future tax obligations—helping residents plan more effectively for their financial futures.

Expanded Relief For Seniors And Texans With Disabilities

For those over 65 or living with disabilities, the new legislation offers even more substantial protection. Senate Bill 23 raises the school district exemption for these groups to $200,000, significantly reducing their taxable home values. These targeted measures help preserve affordability for some of the most financially vulnerable populations.

Reformed Appraisal Rules For Commercial Properties

Business owners also stand to benefit. New appraisal rules limit how fast property valuations can increase and grant stronger rights to challenge unfair assessments. These updates promote a more balanced and transparent system, giving commercial property owners a clearer path to fair taxation based on actual market data.

When Do These Property Tax Changes Take Effect?

While the property tax relief package has officially been signed into law, its most impactful provisions won’t take effect immediately. Instead, they hinge on voter approval through a series of constitutional amendments scheduled for the November 2025 general election.

Pending Voter Approval in November 2025

Three joint resolutions—SJR 2, SJR 85, and HJR 1—will appear on the ballot. These proposed amendments are designed to solidify the long-term changes outlined in House Bill 9, Senate Bill 4, and Senate Bill 23:

• SJR 2 and SJR 85 aim to enshrine the increased homestead exemptions in the Texas Constitution, locking in higher exemption amounts for homeowners, seniors, and individuals with disabilities.
• HJR 1 seeks to formally authorize the new $125,000 exemption for business personal property, providing continued relief for commercial property owners.

Effective Date: January 1, 2026

If approved by voters, the changes will take effect on January 1, 2026. This means that although the bills have been signed, the full scope of relief—including the larger exemptions and updated appraisal caps—will not be reflected in tax bills until the 2026 tax year.

In the meantime, property owners can still explore other ways to reduce their tax burden, including protesting their current assessments under the existing rules.

You Can Still Protest Property Taxes Before These Changes Begin

Although the new property tax relief measures are on the horizon, they won’t take effect until January 2026—and only if voters approve the constitutional amendments this November. Until then, Texans still have the right to protest their current property tax assessments and potentially lower their tax bills this year.

Why Protesting Still Matters

Even with reform in motion, appraisal districts continue to use current valuation methods for 2025. If you believe your home or commercial property has been overvalued, filing a protest can result in immediate tax savings. These protests help ensure your assessment reflects true market conditions—not inflated or outdated estimates.

Build Your Case With The Right Comparables

A strong protest starts with selecting accurate comparable sales, or “comps.” These are recently sold properties that closely resemble yours in size, condition, location, and features. The more precise the match, the stronger your argument that your assessment is too high.

However, raw comps aren’t always enough. Adjustments may be necessary to account for unique characteristics—such as recent renovations, structural issues, or zoning differences—that affect property value.

Know The Protest Process

After compiling your evidence, submit your protest to your local appraisal district by the designated deadline. The case will proceed to the Appraisal Review Board (ARB), where you can present your comps and documentation—either informally or in a formal hearing.

Presenting your case clearly and confidently gives you the best chance at a reduced valuation. Many property owners see meaningful savings by simply taking the time to protest with the right information.

Whether you’re a homeowner or a business owner, Icon takes the hassle out of property tax protests. With no upfront fees and proven results, we do the heavy lifting so you can focus on what matters most.

Final Thoughts

Texas has taken a bold step toward restructuring its property tax system, offering meaningful relief to homeowners and businesses through a carefully coordinated set of legislative changes. The combined impact of House Bill 9, Senate Bill 4, and Senate Bill 23 reflects a growing demand for fairness, predictability, and long-term affordability across the state’s diverse property landscape.

While these reforms promise significant benefits—ranging from higher homestead exemptions to tighter appraisal caps—the final chapter has yet to be written. Voters will play a pivotal role in determining whether these changes become permanent when they head to the polls in November 2025.

Until then, current laws remain in effect. Property owners have a valuable opportunity to lower their 2025 tax bills by protesting their assessments. Whether you’re a homeowner managing rising living costs or a business owner navigating market pressures, acting now can lead to real, near-term savings—while the broader reforms prepare to reshape the future of property taxation in Texas.

By staying informed and engaged, Texans can take control of their property tax outcomes today and help shape a more equitable system for tomorrow.

Frequently Asked Questions About Texas Property Tax Reductions

What prompted the recent push for Texas property tax reductions?

A combination of rising home values, inflationary pressure, and increased demand from residents and business owners led to the latest reform. Texas experienced significant tax spikes in recent years, pushing lawmakers to address affordability and create a more sustainable taxation model.

How are appraisal methods being scrutinized under this reform?

While the bills mention caps and limits, deeper scrutiny is also being placed on how appraisal districts determine property values. Lawmakers are encouraging transparency, standardized methodologies, and reducing disparities between market value and assessed value to prevent overvaluation.

Will Texas property tax reductions change how school districts are funded long-term?

Yes. Though the state is currently using budget surpluses to make up for lost school revenue, long-term solutions may involve revisiting how public education is funded—potentially reducing reliance on property taxes as a primary source.

How do these changes compare to property tax laws in other states?

Texas is now among the few states offering such high exemptions, especially for seniors and those with disabilities. While other states also provide relief, Texas’ approach with combined appraisal limits, exemption increases, and business reforms is relatively comprehensive.

Can these property tax reductions encourage more people to move to Texas?

Absolutely. Lower property taxes, especially compared to high-tax states like California or New York, can make Texas more attractive for both individuals and companies seeking financial relief and economic opportunity.

Do local governments have a say in these tax reductions?

To an extent. While the reforms are statewide, local governments—especially school districts—must adapt to funding changes. Some have expressed concern over long-term budget stability, which may spark future discussions on municipal autonomy and fiscal planning.

How might landlords respond to property tax reductions?

While landlords may benefit from reduced commercial or residential property taxes, whether they pass those savings on to renters is discretionary. In competitive rental markets, however, there may be more incentive to adjust rates favorably.

Are there risks to relying on state surplus funds for school tax compression?

Yes. If the economy slows and surplus funds diminish, the state may struggle to maintain current commitments to school funding. This could lead to renewed legislative debates on sustainable tax structures or potential increases elsewhere.

Do these reforms apply equally to new homeowners and longtime property owners?

Yes, but with different effects. New homeowners may see immediate benefits from higher exemptions, while longtime residents may gain more from the limits on appraisal increases, especially if they’ve already experienced years of rising valuations.

How can business owners strategically plan around these property tax reductions?

Business owners can reevaluate their property portfolios and projected expenses, particularly in light of the higher exemption cap for personal property. They should also consider future investment or expansion decisions based on the more predictable tax landscape.