AUSTIN (KXAN) — Austin City Council approved one proposal – and gave initial approval to another – to provide property tax relief to homeowners on Thursday.
Council approved an ordinance on first and second reading to increase the residence homestead exemption for city property taxes from 10% to up to a maximum of 20%, in accordance with state law. An additional exemption for homeowners 65 or older or those living with disabilities was also approved, increasing the tax exemption from $88,000 to an amount not to exceed $113,000.
The median household stands to save $141 per year, according to data provided by Austin Mayor Steve Adler’s staff.
“What we know is that property tax at all levels is a tax that hurts people at low-wage levels more than upper-wage levels, because they pay a greater percentage of their income on property taxes than do the most wealthy,” Adler said. “City taxes are only a small part of the tax bill – about 20% – but we still need to do everything we can to work on that 20% and keep it as low as we can, and I think these exemptions can help with that.”
Some of the tax burden will shift to commercial properties and multi-family housing properties, like apartment complexes. But Adler said the additional annual expense to an apartment unit is unlikely to exceed a few dollars.
John Sheppard, an Austin real estate broker and homeowner, testified before the city council in favor of the exemptions.
Annual property taxes on his south Austin home, which he and his wife bought more than 20 years ago, exceed $6,000 per year.
“I’m just trying to stay in the neighborhood,” Sheppard said. “It’s just becoming a lot hard primarily (because of) taxes.”
Sheppard is thankful city leaders are paying attention to the problem but said state lawmakers have a responsibility to address rising property taxes – the city’s homestead exemption is capped at 20% under state law.
“There’s all kinds of incentives for people to move to Austin, can we find a reason to help people stay in Austin?” he said.