Texas Senate Bill 4 (SB 4), Senate Bill 23 (SB 23) and House Bill 9 (HB 9) have been signed into law to provide tax relief to homeowners, seniors and small business owners as part of the state’s $10 billion property tax relief package. Because they amend the state’s Constitution, the new laws will pend voter approval in the November 2025 election before they can take effect.
The estimated $10 billion in cuts target school exemptions, enabling millions of residents ranging from first-time homebuyers to seniors on fixed incomes to save thousands of dollars annually.
The first bill signed is SB 4, which raises the Independent School District (ISD) homestead exemption to $140,000 – a 40% increase from the original $100,000 benchmark. Approximately 5.7 million homeowners are projected to save an average of $484 each year from the tax cut.
SB 23 raises the exemption for residents over 65 and individuals with disabilities to $60,000. The 500% increase, when combined with the savings delivered through SB 4’s base exemption, brings the potential total exemption to $200,000. More than 2 million Texas homeowners are expected to save $908 annually.
HB 9 targets small business owners by raising the Business Personal Property (BPP) exemption to $125,000. The Legislature estimates that small business owners will save an average of $2,500 each year.
The House and Senate passed the bills with near unanimous support before sending them to Gov. Greg Abbott’s desk for a final signature. The bills collectively build on the momentum of the 2023 $22.7 billion property tax cut – the largest in the United States’ history.
If the state’s property tax package is approved by voters, the new exceptions would take effect for the 2026 tax year.
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