Texas homeowners and businesses are set to receive expanded property tax relief after voters approved several constitutional amendments aimed at lowering tax bills across the state. The measures increase the state’s homestead exemption for school district taxes and offer new tax relief for business inventory, marking one of the largest property tax cut efforts in recent state history.
The approved amendment raises the homestead exemption—the portion of a home’s value excluded from school property taxes—from $100,000 to $140,000. The exemption is one of the primary tools the state uses to reduce residential property tax burdens, which make up a significant share of what homeowners pay each year. Texans who are age 65 or older or living with disabilities are also positioned to receive additional savings under a related amendment that adjusts exemptions for those groups.
Under the new homestead exemption level, a typical home valued around $302,000 would have seen an estimated reduction of nearly $500 in school district taxes if the exemption had been in place last year. The savings would be even greater for older homeowners and individuals with disabilities, who generally qualify for special frozen or reduced tax rates.
In addition to relief for homeowners, voters also supported an amendment shielding up to $125,000 worth of business inventory from local property taxes. The change affects how school districts, counties, cities, and other local taxing units levy taxes on goods that businesses keep in stock. While the state will cover the cost of the exemption for school districts, other local governments will have to adjust. Cities and counties that rely on inventory taxes to fund public services may need to increase their tax rates or reduce spending to offset the lost revenue.
State leaders have described the broader tax package as an effort to ease financial pressure on residents and improve the business climate. Supporters have argued that increasing homestead exemptions helps people afford to stay in their homes and reduces one of the most frequently cited financial stress points for Texans. Those backing the business inventory exemption have also claimed that easing the tax load on stored goods supports economic activity and helps small and medium-sized businesses manage operating costs.
The tax cuts come as part of a larger state spending plan dedicated to reducing property tax bills. Texas is set to allocate about $51 billion over the next two years to fund various tax reduction measures, including the higher homestead exemption. Some fiscal analysts have raised concerns about the sustainability of these commitments, noting that the spending relies heavily on current strong revenue conditions. If economic growth slows, the state might face pressure to reduce other budget areas since the newly approved exemptions are now part of the Texas Constitution and cannot be easily reversed.
The amendments represent a significant shift in long-term tax policy in Texas, where property taxes have consistently ranked among the highest in the nation due to the absence of a statewide income tax. Both homeowners and business owners are expected to see the effects of the new tax relief in upcoming billing cycles, though the full impact will vary based on local tax rates and property values across the state.
