Texas Leaders Finalize Property Tax Relief Deal For Residents And Companies

Key Takeaways:

• Legislative Summary: Texas passed three key bills targeting property tax relief for homeowners, businesses, and seniors.
• Implementation Timeline: Changes will take effect January 1, 2026, if approved by voters in the November 2025 election.
• Current Action: Property owners still have the right to protest 2025 valuations for immediate savings before the new laws are in place.

Texas property taxes have been a long-standing concern for both homeowners and commercial property owners. With rapid growth across major cities and rising appraisal values year over year, many Texans have felt the strain of higher bills with few options to push back. In 2025, the state took a major step toward meaningful change. Lawmakers finalized a property tax relief package that affects nearly every taxpayer, from families in single-family homes to owners of large commercial properties. This article breaks down what these changes mean, when they take effect, and how you can respond before they’re fully implemented.

At Harding & Carbone, we have spent decades representing property owners across Texas in their efforts to reduce property tax liabilities. Our experience includes more than 250,000 resolved appeals and billions of dollars in valuation reviews. We focus on helping clients understand the system, protect their investment, and take full advantage of every opportunity under state law. Our depth of knowledge in commercial, industrial, and residential valuations allows us to guide property owners through complex tax issues with clarity and precision.

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

Texas lawmakers passed a coordinated set of bills to reduce property tax burdens for homeowners and businesses alike. While each bill targets a specific group or issue, they share the common goal of creating more predictability and fairness across the state’s tax system. Here’s how each measure contributes to that broader effort:

House Bill 9: Business Property Tax Relief And Funding Adjustments

House Bill 9 raises the exemption on business personal property from $2,500 to $125,000, which removes property taxes for many small and mid-sized companies on items like equipment, furniture, and other taxable assets. The bill also uses surplus state funding to help school districts reduce their tax rates without sacrificing revenue, a shift that can ease overall tax pressure across both residential and commercial property types.

Senate Bill 4: Expanded Homestead Exemptions For Homeowners

Senate Bill 4 increases the mandatory school district homestead exemption from $40,000 to $100,000, reducing the taxable value of a primary residence and lowering school-related tax obligations for many Texans. It also includes additional exemption increases for homeowners over 65 and Texans with disabilities, helping protect those on fixed incomes from rising appraisal values and long-term cost escalation.

Senate Bill 23: Long-Term Protections For Seniors And Commercial Property Owners

Senate Bill 23 raises the school tax exemption for seniors and disabled Texans to $200,000, which can significantly reduce annual property tax bills for qualifying households. It also introduces added safeguards for non-residential property owners by setting appraisal limits and reshaping certain valuation rules, helping reduce sudden jumps that can disrupt business planning or cash flow.

Working With These Changes In Real-World Assessments

Even with new exemptions and appraisal protections, the outcome still depends on how a property is valued each year at the county level. Harding & Carbone’s property tax consulting services support owners in evaluating assessments, interpreting legislative changes, and addressing valuation issues that can increase tax liability unnecessarily.

What The Texas Property Tax Relief Package Means For You

The new legislation brings direct financial relief to Texas property owners by adjusting exemptions, limiting appraisal increases, and compressing school district tax rates. These updates are designed to reduce annual tax burdens while introducing more consistency in how values are assessed and taxed across the state. Here’s how the changes may affect you:

Larger Homestead Exemption For Homeowners

The homestead exemption now increases from $100,000 to $140,000 under Senate Bill 4. This means that a greater portion of your home’s value is excluded from school district taxation, resulting in a lower overall tax bill for most homeowners. The change requires no special action from those who have already filed a homestead exemption.

School Tax Rate Compression

School districts will collect taxes at a lower rate per dollar of property value. With the state covering the funding gap, this compression reduces the part of your tax bill related to public education without impacting school budgets. For homeowners, this translates to lower payments each year, even if their home’s value holds steady.

Limits On Yearly Appraisal Increases

To protect property owners from steep tax hikes, new limits will cap how much an assessed value can rise from one year to the next. This cap applies directly to residential and some non-residential properties, offering a safeguard against dramatic market-driven spikes. It brings more predictability to tax planning for both individuals and businesses.

Targeted Exemptions For Seniors And Texans With Disabilities

Residents over 65 and individuals living with disabilities will see their school tax exemption increased to $200,000, as outlined in Senate Bill 23. This adjustment acknowledges the financial pressures that come with fixed incomes and provides long-term stability for households that often face the greatest risk from rising property values.

Relief For Commercial Property Owners

New rules affect how commercial properties are appraised, including caps on how quickly taxable values can grow. These changes give business owners more leverage to manage operating costs and avoid being blindsided by aggressive valuation shifts that often do not align with actual market performance.

When Do These Property Tax Changes Take Effect?

Although the property tax relief bills were signed into law in June 2025, several key components will not take effect until January 1, 2026. Before then, Texas voters will have the opportunity to decide on constitutional amendments that would make the new exemptions and protections permanent. Until that vote happens, the laws remain in a transitional phase.

Voter Approval Required For Full Implementation

Three separate resolutions were passed to place the reforms on the November 2025 ballot. Two of them, SJR 2 and SJR 85, focus on locking in the expanded homestead exemptions from Senate Bills 4 and 23. The third, HJR 1, asks voters to approve the increase in business personal property tax exemptions outlined in House Bill 9.

Effective Date: January 1, 2026

If voters approve these amendments, the new exemption levels and appraisal limitations will officially begin on January 1, 2026. This timeline allows appraisal districts and taxpayers to prepare for a new system, while maintaining the opportunity to take action under current law in the meantime.

You Can Still Protest Property Taxes Before These Changes Begin

While many of the new tax relief measures are awaiting voter approval, Texas property owners still have options to reduce their current tax bills. The right to protest property valuations remains in effect, and taking action before the 2026 changes go live can lead to immediate savings. Understanding the process and preparing the right documentation is key.

Use Comparable Sales To Support Your Protest

One of the strongest tools in a property tax protest is selecting comparable sales that accurately reflect your property’s market value. These should be similar in size, location, and condition, and ideally reflect recent transactions. Properly adjusted comps can highlight discrepancies in the appraisal district’s valuation and support your case for a lower assessment.

Gather Supporting Documentation

Photographs, repair estimates, zoning information, and appraisal records can all serve as valuable evidence. Business owners may also present data such as declining income, vacancy rates, or market shifts to support a protest. A well-documented file strengthens your case and increases the likelihood of a successful appeal.

File And Prepare For The Appraisal Review Board

Protests must be submitted to your county’s appraisal district before the filing deadline, typically in the spring. From there, the case may be resolved informally or presented before the Appraisal Review Board. Being clear, organized, and evidence-driven during the hearing gives you the best chance of achieving a fair valuation.

Apply Smart Protest Strategy Now

You do not need to wait for statewide reforms to see results. Harding & Carbone works directly with property owners to file effective protests and respond to aggressive or inaccurate assessments using market-based analysis and valuation expertise.

Final Thoughts

Texas has taken a significant step toward restructuring how property taxes are calculated and managed. With changes targeting both residential and commercial property owners, the combined effect of House Bill 9, Senate Bill 4, and Senate Bill 23 reflects a broader commitment to fairness, predictability, and long-term affordability. The legislation addresses issues that have affected property owners for years and offers tangible relief that will grow in impact once fully implemented.

However, many of these reforms are still pending voter approval. The November 2025 ballot will determine whether increased exemptions and appraisal caps become permanent features of Texas tax law. In the meantime, property owners should stay informed, evaluate their current assessments, and take advantage of opportunities that are already available through the protest process.

Legislative changes can shift the tax landscape, but accurate valuations remain the foundation of long-term savings. Harding & Carbone provides direct support to property owners navigating these changes, ensuring that assessments reflect both legal updates and true market value. Now is the time to prepare, act, and position your property for the full benefit of the relief that is taking shape.

Frequently Asked Questions About Texas Property Tax Reductions

What makes Texas property taxes higher compared to other states?

Texas does not have a state income tax, which places more pressure on local governments to fund services through property taxes. As a result, property tax rates in Texas tend to be among the highest in the country.

Do property tax reductions affect city services?

Potentially, yes. When revenue from property taxes is reduced, cities may need to adjust budgets or seek alternative funding for services like public safety, infrastructure, or parks. The new legislation helps offset this by reallocating state funds in some areas, such as school districts.

Can investment properties qualify for any of the new exemptions?

Investment properties do not qualify for homestead exemptions, but they may benefit from changes in appraisal caps or valuation reform introduced under Senate Bill 23. Owners of rental or commercial properties can also protest valuations under the current system.

Is there an income limit to qualify for the senior or disability exemptions?

No, Texas law does not impose an income limit to receive the age 65+ or disability exemptions. Eligibility is based solely on age or qualifying disability status, not financial need.

How does the appraisal process affect tax bills in a rising market?

When property values increase quickly, tax bills often rise if taxing entities do not lower their rates. Even without rate hikes, higher appraisals can significantly impact the amount owed unless limits or exemptions are applied.

Are mobile homes eligible for property tax reductions?

Yes, mobile homes are eligible for property tax exemptions if they are the owner’s primary residence and are properly titled. Like other homeowners, these residents can apply for a homestead exemption and protest assessed values.

Will future legislation build on this property tax relief package?

Possibly. While this package addresses current concerns, state leaders have indicated that property tax reform is an ongoing priority. Additional measures could emerge in future sessions depending on voter feedback and fiscal outcomes.

Can property taxes be reduced retroactively if values are lowered on protest?

Yes. If a property owner’s protest is successful, the appraisal district will adjust the value for the current tax year, and the revised tax bill reflects the new amount. Refunds or credits may be issued if taxes were overpaid based on the original valuation.

Do tax exemptions need to be refiled each year?

Most exemptions, including the homestead exemption, only need to be filed once unless ownership or eligibility status changes. However, property owners should monitor their appraisal notices to confirm the exemption remains in place.

Can property owners request a freeze on school taxes?

Yes, homeowners who are age 65 or older or disabled can apply for a school tax ceiling. Once approved, the amount of school taxes owed cannot increase as long as no major improvements are made to the property.