The City’s homestead exemption has been increased from 16% to 20% by unanimous vote of the City Council on first reading, the seventh targeted property tax relief initiative since 2009.
“With their approval of the ordinance on first reading, the Council has increased the homestead exemption to the maximum allowed by law,” explained Chief Financial Officer Sharen Jackson. “The 20% exemption is the equivalent of a 9.25 cent reduction off the tax rate of $0.462 per $100 valuation, and it’s 25 percent higher than the exemption offered last year.”
On an average-valued Southlake home, this exemption results in an annual savings to the homeowner of $620.
With the exemption, City revenue is $5.7 million less than the revenue that would be received under the full tax rate.
“There are many factors to consider in our analysis including how we can provide relief without compromising our ability to maintain adequate reserves, meet our community’s service expectations and pay cash for needed capital projects, ” said Jackson. “This exemption reflects a long-term financial strategy put into place by the City Council that balances the needs of a growing city with the public trust.”
Previously the City has implemented tax relief initiatives in FY ’09, FY ’13, FY ’14, FY ’15, FY ’16, and FY ’17, with a target of increasing the homestead exemption for residential property owners as new commercial properties have developed.
Last year the City was able to return the majority of increase in property values to homeowners through the adoption of a 16% exemption.
City staff will work on the FY 2018 budget through the summer. Public hearings for next year’s budget begin in late August and with adoption scheduled in mid-September.