Homestead Exemption

1. CITY OF COLLEGE
STATION
Homestead Exemption
June 14, 2018

2. HISTORY OF HOMESTEAD EXEMPTION IN
TEXAS
Summary of Exemption
• State of Texas instituted in 1983
• State mandated exemption school taxes is $25,000 in appraised value
• Optional percentage exemptions can be enacted by other taxing units
• Minimum $5,000 per property
• Maximum 20%
• Does not apply to commercial property
• City exemption is automatic if adopted by Council and homeowner has school
district exemption on file

3. MODERN HISTORY OF HOMESTEAD
EXEMPTION IN CITY OF COLLEGE STATION
Initial request for research in Budget & Finance on July 10, 2017
• Research indicated implementation must be by July 1 of the year
• Continued discussion with Brazos County Appraisal District to validate
• Additional conversations and “What-ifs” ran through September 2017
through June 2018 with Appraisal District input
Update requested in Budget & Finance on March 22, 2018
Budget & Finance Recommendation on April 26, 2018
• Recommended to present to Council

4. HOMESTEAD EXEMPTION SURVEYS
Anecdotal Survey by City of College Station
• 11 respondents – 6 implemented in 1980’s, 3 implemented early 2000’s
• 2 most recent respondents implemented in 2015 & 2018 at 7.5%
Appraisal District Survey / Data Provided
• Total of 116 Texas Cities
Austin – 6% Houston – 20%
Dallas 20% Waco – 10%
Denton – 5% Frisco – 7.5%
Arlington – 20%

5. IMPACTS OF HOMESTEAD EXEMPTION TO
THE CITY OF COLLEGE STATION
Percentage Approx. Lost Revenue Mitigating
Increase
Impact on
Avg Home
1% $252,000 .288 cents $14.18
3% $398,000 .455 cents $42.54
5% $664,000 .759 cents $70.89
10% $1,328,000 1.52 cents $141.79
Impacts of Exemption
• Small reduction in property taxes paid for Homesteaded properties
• Without mitigating increase, reduction in General Fund revenue
and debt capacity

6. PROCESS TO IMPLEMENT HOMESTEAD
EXEMPTION
Process – Latest Timing
• Budget and Finance Recommendation discussion – April 26th
• Council Workshop – June 14th
• Consent Agenda Ordinance – June 28th
• Signed Ordinance to BCAD – NO LATER THAN July 1st

7. COUNCIL DIRECTION
Possible Options
1. No implementation
2. Implement an exemption
3. Implement an exemption and offset with tax rate increase
4. Other options
Staff Requests Council Direction