City of Allen approves first homestead tax exemption

CFO Pete Phillis presented a proposed tax relief at a Tuesday city council meeting.  City of Allen

Allen City Council has made its first step in providing tax relief to its residents.  

At a Tuesday Allen City Council meeting, the city’s Chief Financial Officer Pete Phillis presented an option to launch Allen’s first homestead tax exemption.

During a strategic planning session held prior to the meeting, city staff and council had agreed on offering relief of $5,000 or 5% of a resident’s property value, whichever is greater.

To be considered a homestead, the home must be declared as the homestead of the property owner to receive the benefit of the exemption. Property owners are only allowed to declare a single property as a homestead.

At the meeting, Phillis said this would be a first step in shifting the property tax burden slightly toward commercial entities to recover the loss of revenue.

Council members said that Frisco is the example they would like to follow, where the tax rate is kept the same year-to-year, while the exemption increases.

Council member Dave Cornette said he wanted to see a 20% homestead exemption. Other council members agreed that 5% is a good start and can increase each year as needed.

Council member Chris Schulmeister said that Allen has the lowest tax rate compared to its surrounding cities, with the exception of Plano. Schulmeister said that he would like to maintain a low tax rate for residents by shifting more tax burden to commercial entities over time.

“This is the first step in providing true tax relief for homeowners in the city of Allen,” Allen Mayor Ken Fulk said. “I also think slow stepping is a good thing, because you don’t want to get too far ahead too fast with this.”

Fulk said the tax relief on residents will also help the city better track commercial growth in the coming years.