City Council voted unanimously Monday to provide a small property tax exemption for qualifying homeowners.
It’s the first time the City of San Antonio will provide a homestead exemption. The City could raise property taxes to recoup those costs as part of its 2020 budget conversations, but Mayor Ron Nirenberg and other Council members balked at that idea.
The minimum-allowed homestead exemption will shave $5,000 off the appraised values of homes that are the primary residence of a property owner. The result will be slightly decreased tax bills from the City, which accounts for roughly 20 percent of total tax bills.
“We do have to be cognizant of how equitable our property tax is … please know this is just the start,” said Nirenberg, who voted in favor of the exemption. In previous budget discussions, Nirenberg has been opposed to providing nominal tax relief at the expense of the City’s budget. Council and City staff plan to continue to enhance tools for affordable housing and work with the state to create new ones.
“Homeowners have been asking for property tax relief,” Nirenberg said earlier Monday. “I intend to provide it without strings attached.”
The mayor will work with City staff to identify budget cuts and possible efficiencies, he said, but they will not impact “public safety or essential services.”
The 0.01 percent exemption will save an average homeowner an estimated $28 per year, even less if the City increases its property tax to make up the difference. The exemption will remove nearly $6 million from the City’s budget – $3.6 million from the general fund, which the City uses to fund programs and services across San Antonio, and $2.2 million from the City’s debt service.
Councilman Clayton Perry (D10) has lobbied his colleagues since he was first elected in 2017 to consider a reduced tax rate or homestead exemption. He and Councilman John Courage (D9) filled a council consideration request in February to direct Council to consider the exemption.
“Over the last two election cycles … the top three [issues] that were continue to ring out were property taxes, police and fire protection, and infrastructure,” Perry said. “[And it’s important to let them know] City Council is listening to them and we are offering them tax relief.”
City Council will consider its 2020 budget in August, after its monthlong break from regularly scheduled meetings in July. In the meantime, City Manager Erik Walsh and department staff will be crafting their draft budgets for consideration.
The budget is also under pressure because of $11 million less in CPS Energy revenues so far, $7 million less in telecommunication company fees, and uncertainty with the firefighter union’s contract and Senate Bill 2 revenue caps that will come into effect in 2021.
Next year’s budget could include a tax rate increase to make up for the homestead exemption while maintaining funding for established and new initiatives, but that would curb the savings that homestead residents would see on their City tax bills. That option was presented to Council last week, but it has not seemed to gain traction among members.
Several Council members voted in favor of the exemption but cited concerns about the uncertainty of new State laws that could impact the City’s bottom line and the nominal relief taxpayers will see on their bills as a result of the exemption.
“What I hear more from my neighborhoods is that we just need more services,” Councilwoman Shirley Gonzales (D5) said. More parks, programs, and barbecue pits, for instance. “I believe that people are willing to sacrifice $28 a year [for such services].”
However, she said, it will come in handy politically to be able to point to the homestead exemption when voters ask what City Council has done for them.
In other words, It’s politically difficult to vote against a homestead exemption.
“This is a no-brainer,” Councilman Manny Pelaez (D8) said. However, while City Council can take a “victory lap” today after the vote, “I’m not sure that this is a victory that is going to be felt by the taxpayer for very long. … [This exemption is] probably not going to be very much appreciated or remembered.”
Appraisals consistently go up every year and drive the increases that homeowners see in their bills. An audit of the appraisal process, initiated by Pelaez and City Council earlier this year, is underway.
Bexar Appraisal District is also reviewing its own records to make sure eligible homeowners are taking advantage of their exemptions and that others aren’t abusing it (claiming a home is a homestead when it is not the primary resident), said Councilman Roberto Treviño (D1), who chairs the appraisal district’s board.
Renters, a significant portion of San Antonio’s population, would not benefit from a homestead exemption, Treviño noted. He plans to file a Council consideration request to create a renters commission to better include the rental community.
House Bill 3, also approved by the State during its latest legislative session, will have a greater impact on property tax bills. About half of property tax bills go to school districts, which have been receiving less and less funding from the state over the years. HB 3 replenishes some of that funding so school districts can lessen its tax burden to property owners. School districts account for about half of total property tax bills.
San Antonio Independent School District is expected to reduce its bill for the average-value home by $100, North East ISD by $163, and $140 in Northside ISD, according to City estimates.
Of Texas’ five largest cities – Houston, San Antonio, Dallas, Austin, and Fort Worth – San Antonio is the only one that had not offered a city homestead exemption. San Antonio’s tax rate is the second lowest, after Austin, and it offers a valuation freeze for residents who are 65 and over as well as an exemption of up to $65,000. Disabled residents can receive a $12,500 exemption.
Homestead exemptions in other cities provide more substantial relief than San Antonio’s 0.01 percent; Houston, Dallas, and Fort Worth have a 20 percent exemption – the maximum allowed by the state. Austin’s is 10 percent. Those cities, however, do not provide a valuation tax freeze for senior citizens as San Antonio does.
“This is a small step and I don’t consider this to be the last step,” Perry said. “I look for more increases to the exemption in the future as we can afford it.”
Iris
Take a house in 10 areas of town and look at the tax increases since 2000.
It will blow your mind.
$100 reduction per average home?
The Appraisal district has abused the system for so long it is leaving people homeless.
One home on the Eastside , Westside or Northside renovates an old house and they put $40,000 to $100,000 in renovations and it sales for twice that increase. Bexar County Appraisal District takes that sale and imposes the increased value on all other houses that have not done anything to their homes. My guess is 90% do not disput their values expecially elderly and the disadvantaged. This is a contact tactic they do year after year. That’s where the tax value income is coming from.
Home values go from $140,000 to (20% increase) $160,000 to $200,000 and then to $240,000. What are the taxes paid by citizens every year and the increase? The city wants to vote and give $100.00 decrease?
And those are YEAR to YEAR increases. Commercial is even worse, I’ve seen them levy 60% increases from one year to the next. They are out of control. If the city wants affordable housing, don’t talk to the citizens or developers got talk to Bexarcad
Property taxes that owners pay should not be allowed to go up any higher that the National growth index unless they house is sold, at that time the taxes go up to the new owner for the amount of the value the house was sold for. No one is making 20% increases in salaries. Expenses are going up and the city and county and school districts. Current values have not limit but the tax increase is at 10% from year to year. I would love to get that kind of investment from a bank it is not a realized value unless it is sold. Homeowners are not getting more money in their pockets just because the guy down the street sold his house for so little, they new owner put $50,000 in the house and increased the value to over $$75,000 increase at the least and now all the home owners around there have their taxes go up to $75,000 in taxable values and they have not done a thing to their homes. Why is this happening. Just because a house in an area sales for more that does not mean that all the other houses should be increased. Its like being guilty and charged with a crime (Penalized) without any evidence.
The appraisal process is what needs to be changed. My home’s appraised value has increased by $70k in the decade I’ve lived here. Since this is the home that I hope to live in for the rest of my life and I don’t have any children, what good does the increased appraisal do for me? Actually, the only thing it does is increase my property taxes. I will never realize any financial benefits from the increased appraisal. The only people who do realize financial benefits from an increased appraisal value is a home seller.
We should consider a homestead exemption whereby each year property owners pay property taxes on their home based on the original purchase price (so refinancing at a lower value can’t help property owners out). Our yearly statement would still have an updated appraisal value included for potential sale purposes only. In the event of a home sale, the seller would pay property taxes to cover the difference of the original purchase price and each year’s appraisal value. In this way, only property owners who realize financial gains from their property get taxed for those gains. That way, those who won’t realize financial gains are penalized for unrealized potential.
THIS IS WORTHLESS!!!!!!!!!! $28 whole dollars. For everyone. This does NOTHING to help victims of gentrification. NOTHING!!
I thought we already had homestead exemptions.
So did I, this is nothing new
BCAD raised the value of my house by $50K over the value determined by the citizen panel from last year. There is no explanation as to how my house is suddenly worth $50K more. Now they offer a $28 dollar discount on my $6,000 tax bill. WTF?!?
SA gets a .01% Homestead exemption when other Texas cities get 10-20%? AND the city will raise its tax rate which will essentially wipe out the exemption? AND the BCAD helps the city by having no matrix for assessing the value of your land and property. Having gone through the process of protesting a valuation increase-facts and figures in hand-it was obvious that the BCAD does not use any type of matrix that is normally used to measure valuation. Until BCAD is brought under control homeowners will always have an arbitrary value place on their property.
The city needs to stop financial incentives to build apartments and expensive condos…the city is responsible for much of the property tax mess citizens are facing due to the lack of foresight for what would happen…unless the incentives were given to change the character of neighborhoods and make this an even more segregated city…by pushing one population of people out of their homes in favor of another? The city has no plan to help mitigate gentrification. These abatements and incentives cost the city tax revenue…and who do you think will pay for these abatements/incentives? The homeowner!!
“Renters, a significant portion of San Antonio’s population, would not benefit from a homestead exemption, Treviño noted. He plans to file a Council consideration request to create a renters commission to better include the rental community.”
Renters should not benefit from a Homestead exemption! They are NOT property owners! As for having a renters commission to include renters in a homestead exemption…you have to be kidding!! The people they rent from pay the taxes!! So will you do away with the owners paying the property tax and pass it on directly to the renters and they will then be eligible for the exemption? Or will you just give renters an exemption for a property they do not own in the form of a check from the city? If you live in affordable housing will you be eligible for the exemption although you are already paying below market rent? How will you value the various amenities of apartments/rental homes? How will you decide the value of various floorpans/amenities in apartments? How will you handle the PROPERTY TAX ABATEMENTS that have been given to developers of apartments who don’t pay property (or school taxes in some instances) for a decade or more? Will you have to hire more levels of bureaucracy to handle this?
So what started out as giving a Homestead exemption because you want us to know you listened and care, but then you raise the tax rate which will do away with the benefit of the exemption is now a bait and switch scheme…no relief for homeowners…and on top of not actually providing real relief to homeowners you want to include renters-who do not pay property taxes directly to the City Tax Assessor/Collector-in the exemption? We are not fools!
The city is in a position as an attractive place to invest without having to throw incentives to developers. They should share in the investment of building in this area of opportunity. They will get a return on their investment. The community should not be sacrificed for the profit of a few. The new city council will hopefully remedy this for the sake of their constituents who voted them into office.