Homes in the Luckey Ranch subdivision are seen in a Tuesday, Nov. 1, 2022 aerial photo.
San Antonio Express-News
Molly Smith, Staff writer
Mayor Ron Nirenberg wants to increase — and possibly double — the city’s residential homestead exemption.
He has the support of a handful of City Council members who want to see the city offer substantial property tax relief as area property values continue to rise.
Increasing the local homestead exemption is not something staff initially recommended Wednesday when they presented the council with a draft budget for next fiscal year. Staff will continue to refine the budget over the coming months. They’ll present a proposed budget in early August, which the council will adopt in September. The fiscal year begins Oct. 1.
“I’m inclined to increase that homestead (exemption), perhaps even to max it out, given the fact that it’s really families that are still struggling with the burden of rising costs, rising inflation, etc.,” Nirenberg said at Wednesday’s budget briefing.
In San Antonio, the market value of single-family homes rose 11.8 percent from 2022, according to Deputy Chief Financial Officer Troy Elliott. Multi-family property values grew 17.9 percent, and commercial values are up 13.3 percent.
Homestead exemptions shield part of a home’s assessed value from taxation, though city taxes make up a small portion of a homeowner’s overall property tax bill, which includes countywide and school district taxes.
Last year, the council raised the city’s residential homestead exemption to 10 percent of a home’s assessed value, a huge jump from the previous 0.01 percent exemption, or a minimum of $5,000 per household.
Unlike Houston, Dallas, Austin and Fort Worth, San Antonio has not set its homestead exemption to the maximum 20 percent allowed by Texas law, which reduces the taxable value of someone’s primary residence by one-fifth of its assessed value.
Bexar County commissioners last year increased the county’s homestead exemption to that maximum amount.
“Let’s take it up to the max, just like the county did this last year, and take it up to the max here for the city also — combined with what the county is doing, combined with what the state is doing, where it makes it a meaningful tax relief package for our homeowners here,” said outgoing District 10 Councilman Clayton Perry, who leaves office at the end of this month.
Councilmen John Courage and Mario Bravo, representing Districts 9 and 1, respectively, also supported doubling the current exemption.
Courage advocated for the city to go even further by raising exemptions for seniors 65 and older and people with disabilities from $85,000 to $100,000. Both seniors and disabled homeowners have a tax freeze in place.
District 8 City Councilman Manny Peláez urged caution on landing on a homestead exemption increase until after the Legislature wraps up.
“Every time they do tax relief, it’s almost always by forcing cities to do more with less,” Peláez said. “I’m not comfortable committing to a certain percentage of an increase for a homestead exemption ... until I know after this legislative session exactly what these folks in Austin are planning to do to us.”
State lawmakers have yet to resolve disagreements about how to use billions of dollars in budget surplus to cut property taxes ahead of the regular session’s May 31 end date. The Senate is pushing for increasing the state’s homestead exemption, while the House wants to lower the appraisal cap.
The City Council will receive an update on city property tax revenue and potential tax rates in June once all of the county’s property tax protests have been filed.
molly.smith@express-news.net