Austin City Council increases homestead exemption from 6% to 8%

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Austin homestead exemptionAustin City Council approved increasing the homestead exemption by 2 percent to a total 8 percent June 23.Amy Denney/Community Impact Newspaper

The city of Austin will take an approximately $3.8 million hit to revenue as eligible taxpayers are due to receive a higher percentage of property tax relief, Austin City Council narrowly decided during its June 23 meeting.

After a 6-5 vote, council members approved a 2 percent increase, from 6 to 8 percent, to the city’s homestead exemption, which would save taxpayers $9.18 per $100,000 of assessed value per year, according to city documents. Houston, Dallas and San Antonio all have 20 percent general homestead exemptions.

Taxpayers who use their home—whether it is a detached structure, condominium or mobile home—as their main residence can qualify for a homestead exemption, which grants them a percentage of property tax relief. For example, a taxpayer whose residence is assessed at $200,000 and who receives a homestead exemption would pay property taxes as if the home were worth $184,000.

District 2 Council Member Delia Garza said she is against any homestead exemptions and would prefer council would go down to a 0 percent exemption.

“It hurts those who need the relief the most,” she said. “Low-income families get the minimum benefit from this, and it gives the most benefit to the wealthiest.”

Council members Greg Casar and Sabino “Pio” Renteria said they agreed with her and voted against the increase to prevent hurting low-income residents with a regressive tax.

Council Member Kathie Tovo said any increase in the homestead exemption would require cutting services.

“As we consider increases, it would be helpful to balance that with what services would need to be trimmed,” she said. “I’m not sure how to pay for [an increase].”

But other council members pointed to council’s vote in 2015 to ultimately achieve a 20 percent homestead exemption. District 10 Council Member Sheri Gallo said achieving a 20 percent exemption could have an impact on helping senior citizens age in place.

“I think it’s important to maintain our commitments to the community,” she said. “We’re seeing property values explode … and as a result property taxes are increasing.”

Two other motions to increase the homestead exemption by either 14 percent or 4 percent failed.

Mayor Steve Adler said the city has done a lot for low-income residents, such as providing more affordable housing. He said affordability affects people at all levels of income in the city.

“We have to help everybody, and not one total is going to help everybody,” he said. “This is one way we can do that.”