On November 7, 2023, Texas voters will have the opportunity to vote on many amendments to the state’s constitution. One of those amendments is Proposition 4 - HJR 2 . This amendment is proposing to, among other things, increase the amount of exemption for school district taxes on residential homesteads. The current homestead exemption is $40,000 of the market value of the residence. This amendment would increase the exemption to $100,000 of the market value.
HJR 2 is also proposing to adjust the amount of the limitation of school district taxes imposed on the residence of an elderly (any person aged 65 and older) or disabled person by an additional amount not to exceed $10,000 of the market value of a homestead residence. An eligible disabled person who is 65 years or older may not receive both exemptions from a school district but may choose between the two.
If passed, the bill will be retroactive for the 2023 tax year. Due to this portion of the bill, Texas taxing authorities are sending out tax bills with both the current amount of taxes and the proposed amount of taxes, should HJR 2 pass. The dual amounts on the tax bills have created some confusion within lending organizations and title companies as to which amount to pay and set up for escrow of newly acquired properties and refinances closing in October and November of this year. It has been suggested to defer to the guidance of the title company’s interpretation, but as always, review with your own internal counsel or compliance departments.
DocMagic will continue to provide updates as they become available. If you have additional questions about this topic, please contact DocMagic’s Compliance Department.
