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By Giulia Carbonaro
Senior Reporter
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Texas Governor Greg Abbott is expected to sign new legislation offering property tax relief to homeowners in the state struggling with rising bills, on Monday.
If endorsed by voters in November, the measures pushed forward by the GOP-led Texas legislature would significantly lower the cost of homeownership for millions of Lone Star State residents, including seniors and disabled owners, at a cost of over $3 billion.
It would also dramatically slash revenues for local governments funding crucial public services, which the state would have to make up for.
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Why Do Texas Lawmakers And Abbott Want To Cut Property Taxes?
While the Lone Star State is known for its relatively low tax environment, homeowners actually pay some of the highest property taxes in the country. These are levied by local governments and used for funding schools, streets, roads, police and fire protection. The governing body of each of these local governments sets its own tax rate based on a property's appraised value.
But property taxes all across the U.S. have surged in step with home values since the pandemic, when historically low mortgage rates sparked a homebuying frenzy which had its epicenter in some of the country's most affordable states, including Texas. Between 2019 and 2023 alone, median property taxes in the Lone Star State rose by 26 percent, according to data by Cotality, formerly CoreLogic.
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As of 2025, Texas homeowners are paying the seventh-highest property taxes in the nation, according to SmartAsset, at an effective rate of 1.63 percent. That is a lot higher than the national average, which stands at 0.90 percent, with the typical Texas homeowner paying $3,872 annually in property taxes.
Abbott has long been trying to lower the property tax burden on Texas homeowners, signing in 2023 what was then the largest property tax cut in the state's history at $18 billion. But that intervention barely helped the many homeowners struggling with rising bills, and the Republican governor called for lowering property taxes as a priority during this year's legislative session.
What Is In The New Package Of Property Tax Cuts?
The package of property tax cuts that Abbott is expected to sign on Monday at the Robson Ranch clubhouse in Denton includes two bills recently passed by the Texas House and Senate that would back two constitutional amendments.
One bill, SB 4, would raise the existing homestead exemption from $100,000 to $140,000 for all homeowners, while the other, SB 23, would raise it to $200,000 for those with disabilities or those aged 65 and above.
"You've always heard that mantra, 'I don't want to rent my home—after it's paid for — from my school district,' " Lt. Gov. Dan Patrick said after the two bills passed the Texas legislature. "Well, seniors, to the average senior out there, you're never going to have to do that again."
SB includes a provision guaranteeing school districts would not lose funding due to the lower property taxes, trying to answer criticism that the cuts would harm public services. It would be up to the state to raise the difference—which is estimated at $3.5 billion.
What Happens After Abbott Signs The Legislation?
In order to implement the constitutional amendments approved by the legislation, voters would have to back the homestead exemption hikes in November.
Texas Senator Paul Bettencourt, R-Houston, who introduced the legislation, will be attending the signing ceremony on Monday. He said that he hopes there will be a "record turnout by the public" to get these tax cuts "enshrined" in the Texas constitution.
Newsweek contacted Abbott's office and Bettencourt's office for comment by email on Monday morning.
Are you a Texas homeowner? We want to hear from you. Tell us what you think about the new package of property tax cuts by emailing g.carbonaro@newsweek.com.
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