FRISCO — Property tax relief is coming to Frisco homeowners.
The City Council on Tuesday unanimously passed a 7.5 percent homestead exemption that goes into effect for fiscal year 2018 to help homeowners grappling with skyrocketing property appraisals.
The exemption provides about $143 in savings for property owners, based on the city’s tax rate of $0.45 per $100 in valuation and the city’s average home value of $391,923. The exemption applies only to homeowners living in their primary residence as of Jan. 1. Commercial and rental properties do not qualify.
“We have been a victim of our own success,” Mayor Jeff Cheney said of the rising property values each year.
“People are being priced out of their homes, he said. “Our city has a history of being fiscally conservative, and this is the most effective way to give Frisco homeowners immediate tax relief.”
This is the first time that Frisco has approved a homestead exemption. It joins many other North Texas cities, including Dallas, Carrollton, Coppell, Balch Springs, Cockrell Hill, Grapevine, Hutchins, Garland, Plano, Prosper, Highland Park, Rowlett, Seagoville, University Park, Farmers Branch, Addison and Irving. Many have had exemptions on the books for years. Dallas and Collin counties also offer homestead exemptions.
Homestead exemptions range from 1 percent up to the maximum of 20 percent. City councils can vote to increase or lower the percentage of the exemption each year.
Last month, the Grand Prairie City Council increased its homestead exemption to a minimum of $10,000. That means that a home appraised at $150,000 with a homestead exemption will have its property taxes calculated based on a $140,000 valuation.
Frisco City Council member Shona Huffman said the city has been looking at options for more than a year. “It’s about doing the right thing for our citizens,” she said.
She also noted that the city’s measure provides greater savings than the failed property tax overhaul considered by state legislators during their most recent session. Limits on property tax growth are expected to be taken up during the Legislature’s special session that starts July 18.
About 34,640 homes in Frisco are eligible for the homestead exemption. It is projected to reduce the city’s revenue by about $3.2 million next fiscal year.
Homeowners who already receive a homestead exemption through their school district will automatically receive the city’s benefit. New applicants must register for a homestead exemption through their county’s central appraisal district.
The savings with a homestead exemption are similar to a 3.6-cent property tax rate decrease, but it benefits only homeowners. And it won’t compromise the city’s maintenance and operations rate, which remains the same for commercial and rental properties.