Council discusses senior/disabled homestead-exemption options; no change adopted

City Finance staff presented options and background information on homestead and 65-and-disabled property tax exemptions as the council prepared for the upcoming budget and tax-rate process.

Mark Holloway, the city’s chief financial officer, told the council that the city’s current 65-and-disabled exemption is $90,000 and that an increase of $5,000 in that exemption would lower an eligible homeowner’s tax bill by about $21 at the current tax rate, while shifting roughly $3.26 per homeowner per year to noneligible homeowners in the current levy model. Holloway explained the three exemption types the council can consider: the 65-and-disabled exemption (a value exemption targeted to eligible owners), a homestead exemption (percentage-based and eligible to all homeowners, with a statutory 20% maximum), and a 65-and-disabled tax freeze (a permanent freeze once adopted). He noted that any change must be adopted before July 1 to be filed with the Collin County appraisal district.

Council members discussed pending state-level measures that would affect homeowner tax burdens and weighed the trade-offs between targeted exemptions and a general homestead exemption. Several members said the recent state action (referenced in the meeting) was likely to reduce homeowner taxes and that, given strong property-value growth and the city’s spending needs for roads and services, they were not inclined to change local exemptions at this time. Council members proposed staff return with more detailed analysis of a citywide homestead-exemption option for future budget discussions.

No ordinance or resolution was adopted on the matter at the meeting; staff listed this item for discussion to allow time-sensitive consideration before the July 1 filing deadline.