AUSTIN (Nexstar) – Texas House Speaker Dade Phelan (R-Beaumont) announced legislation that he called the “largest property tax cut ever” in Texas. Phelan said that House Bill 2 will call for lowering the state’s cap on property tax appraisals to 5%.

Current Texas Property Tax Code limits increases of the total assessed value of a homestead to 10%. Tightening that limit to 5% could have a significant benefit to homeowners. Property value drives a large portion of the increase in property tax bills. Texans who have seen their property tax rates drop often end up still paying higher bills because rising property values tend to outpace cuts in the tax rate.

Phelan made the announcement Thursday morning while speaking at the Policy Summit for the Texas Public Policy Foundation. He said the bill goes beyond homesteads, and would lower the cap on appraisal increases for commercial property as well.

Phelan’s announcement comes one day after State Sen. Paul Bettencourt (R-Houston) filed legislation to raise the state’s homestead exemption from $40,000 to $70,000. A homestead exemption is the amount of a home’s value that is exempt from property taxes.

“This is one of the keys to control the growth of property tax bills and in this case actually reduce them for as long as you own a home in Texas,” Bettencourt said of the legislation in a news release.

Lt. Gov. Dan Patrick vowed in his inaugural address that the Senate would pass legislation to increase the homestead exemption. Sen. Bettencourt noted that the legislation had unanimous support in the Senate. If it passes, the legislation would require approval from Texas voters before the exemption increase could take effect.

Phelan said that House Bill 2 would be filed on Thursday.