SAN ANTONIO – As home and property values continue to rise, the City of San Antonio is expected to cut its property tax rate for the second year in a row and possibly offer additional relief for property owners.
“I can say with certainty that FY 2024 will be a year of additional tax relief for our City of San Antonio residents,” Mayor Ron Nirenberg said during an early budget discussion session Thursday.
State law restricts cities from collecting more than 3.5% over the previous year’s property tax revenue for maintenance and operations, excluding new construction. Going over that cap would trigger an automatic election on the tax rate.
Because the market value of existing property around Bexar County is up 13% on average over last year, the city is all but guaranteed to pursue tax relief efforts for FY 2024 to stay below the cap. Those measures would apply to this year’s tax bills.
It’s not clear yet exactly what that tax relief would look like. Last year, the city council combined multiple elements: it lowered the tax rate for all property owners, raised the homestead exemption to 10% of a home’s appraised value, and increased additional exemptions for senior and disabled homeowners to $85,000 each.
All four of those measures are on the table again this year said Deputy Chief Financial Officer Troy Elliott, though he expects a lower tax rate will definitely be part of the equation.
The homestead exemption could be raised as high as 20% of a home’s taxable value, Elliott said, while the exemptions for senior disabled homeowners have no limit.
Elliott said city financial staff would recommend an option to city council at a May 10 meeting.
Nirenberg asked for recommendations “where we can target residents with the most relief who need it the most.”
City financial staff are also keeping an eye on property tax bills in the Texas legislature that could affect the city’s plans. The top two bills they are watching, however, wouldn’t affect the city’s 2024 fiscal year, which runs from October 2023 to September 2024.
One bill in the Texas Senate would raise the homestead exemption for school district taxes. It would take effect immediately after a referendum vote in November but would not directly affect the city.
Another bill in the Texas House would more tightly cap how much property appraisals could increase every year. While that bill would affect city tax revenues, it wouldn’t be effective until the city’s 2025 fiscal year.
Elliott said last year’s tax relief efforts meant the average San Antonio homeowner actually paid less taxes in 2022 than they did in 2021. However, the city is only one of several entities on the tax bill.
“We can explain that we’ve decreased our rate and raised our exemptions. But again, it means almost nothing if their entire bills go up because their appraisal led to an increase in the amount in value in the rest of their bill,” said District 2 Councilman Jalen McKee-Rodriguez.
Property owners have until May 15 to file a notice to appeal their appraisal value.