Texas voters pass homeowner tax relief legislation

AAHOA and THLA applaud the new law’s passage

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tax relief legislation Texas
Texas voters approved Proposition 4, a constitutional amendment reducing property taxes this year. The amendment allocates $12.6 billion in state funds for education, reduces reliance on local property taxes, raises the Texas franchise tax exemption from $1.24 million to $2.47 million, providing businesses with relief, and caps appraisal values for commercial properties under $5 million.

TEXAS VOTERS APPROVED Proposition 4, a constitutional amendment reducing property taxes this year. AAHOA and the Texas Hotel & Lodging Association, which collaborated to support the amendment, said Proposition 4 ensures property tax relief for commercial hotel properties.

The amendment allocates $12.6 billion in state funds for public education, lessening reliance on local property taxes, according to AAHOA. Moreover, it raises the Texas franchise tax exemption from $1.24 million to $2.47 million, providing businesses with tax relief, and caps appraisal values for commercial properties under $5 million.

Proposition 4 was passed with over 83 percent of the vote, emphasizing to legislators the priority of reducing property taxes.

In March, AAHOA’s former chairman Nishant “Neal” Patel testified before a legislative committee in the regular session, underscoring the substantial property taxes hotels pay annually and stressing the necessity of reforming the valuation of commercial properties.

“Although Texas is often recognized as a low-tax state, primarily due to the absence of a state income tax, property owners in the state contend with some of the highest property tax bills in the nation,” said Laura Lee Blake, AAHOA president and CEO. “AAHOA and THLA will continue to advocate on behalf of hotel owners in the state of Texas, ensuring the viability of their businesses and a reduction in unnecessary and exorbitant property taxes.”

“This is the most significant property tax reform the State of Texas has ever passed,” said THLA general counsel Justin Bragiel. “These tax reforms will save Texas property owners, including hoteliers, billions of dollars over the coming years. This will have a huge impact on hoteliers and lodging operators, and we’re proud of the work we’ve been able to do to protect the business interests of our members and countless commercial property owners across the state.”

Summary of Property Tax Reform via Proposition 4:

  • Allocates $12.6 billion in state funds for public education, reducing the need for local property taxes.
  • Doubles the Texas franchise tax exemption from $1.24 million to $2.47 million, offering businesses a tax break.
  • Caps appraisal values for commercial properties at $5 million or less.
  • Mandates the direct election of county appraisal district officials for enhanced taxpayer accountability.
  • Raises the residential homestead exemption from $40,000 to $100,000.

“As entrepreneurs and landowners, the burden of high property taxes is a significant challenge that is prevalent across the United States,” said AAHOA Chairman Bharat Patel. “It’s crucial for states and legislators to revisit these tax policies to protect small businesses, as a fair and balanced approach is essential to ensure the sustained growth and job creation that our communities need. We applaud Texas voters for overwhelmingly passing Proposition 4.”

During a recent city council meeting, residents, including a local association of Asian American hotel owners, expressed concern about a proposed ordinance imposing new requirements on hotel development. The ordinance, intended to replace a ballot measure mandating hotels to accommodate homeless individuals alongside regular guests, prompted nearly two hours of public comment. The council subsequently voted to forward the ordinance to the city attorney’s office for review before the final vote.