Frisco City Council voted unanimously June 30 to adopt an ordinance raising the city homestead exemption to 20%, a change officials said will lower the average city tax bill for qualifying homeowners and take effect for the Jan. 1, 2025 tax year.

The change, approved 6-0, came after a staff presentation showing strong property-value growth in Frisco and a discussion among council members about the mechanics of the voter-approval tax-rate rules under state law. Derek Hahn, chief financial officer for the city, told the council that “today is the last day to take action on the homestead exemption to be effective for the 01/01/2025 or fiscal year 26 tax bills.”

City staff presented updated taxable-value estimates showing roughly $900 million in additional assessed value since prior estimates and a new valuation near $52.4 billion. The staff presentation included examples of how different exemption levels would affect taxable value and the city portion of the tax bill. Under staff calculations, the city portion of the tax bill for a homeowner with an average market value of $804,000 would fall if the city adopts the voter-approval tax rate scenario; staff showed the city portion dropping about 2.4% under one modeled scenario and projected a roughly $120 annual city-only reduction for a typical home under the 20% exemption in one slide.

Hahn and other staff also reminded the council of other local exemptions and freezes in place, noting the city already provided a 15% homestead exemption, a disabled-persons exemption of $80,000, and a senior tax freeze. Hahn and other presenters emphasized that the modeling assumes the council will adopt the voter approval tax rate when setting the overall rate, and warned that changing that policy would materially affect how services are funded.

Council members discussed the trade-offs. One member noted the homestead exemption benefits homeowners while shifting relatively more of the tax burden onto commercial property owners and larger taxpayers. Joe (Budget and Audit Committee member) said the current year offered “far less uncertainty” than prior years and that staff and the committee had been working toward the state maximum over several years. Council members also recalled that Frisco began increasing the exemption in 2018 and has taken gradual steps to reach the state maximum of 20%.

A motion to approve the ordinance adopting the 20% homestead exemption was made by Bill (Councilmember), seconded by Tammy (Councilmember), and passed unanimously. Councilmembers and two council members-elect who were in attendance offered brief remarks congratulating staff and thanking outgoing members; council formally adjourned after the vote.

The ordinance selected the 20% option over an alternative 17.5% ordinance that was also on the agenda. City staff flagged that final valuation numbers could change slightly before tax-roll certification, and that the adopted exemption and the city’s choice about whether to adopt the voter-approval tax rate in future budget cycles would both affect next year’s tax-rate calculations and service funding decisions.