June’s last Town Council meeting saw a vote for an increase in the homestead tax exemption for residents. The increase was approved and the exemption was officially raised from 7.5 percent to 10 percent. Council member Jeff Hodges explained what that means for the residents of Prosper.
“This will save the residents on their taxes each year,” Hodges said. “It means that they will be exempt from being taxed on 10 percent of the appraised value of their home. It’s very nice to be able to provide a little bit of relief for the residents. There are a lot of things that need to be taken care of with the number of people coming into the town. It is very important that residents know that they do have to file for the exemption — it is not automatic.”
Prosper residents are able to file a homestead exemption on one home, their primary residence. The current Prosper tax rate is 52 cents per $100 taxable value, which will be applied to the other 90 percent of the appraised value of the homestead after the extension.
The typical home in Prosper is valued at $495,762, and with the new exemption in place, the tax exposure will decrease by $49,576, saving the homeowner about $258 in ad valorem taxes.
“Homeowner tax relief is something everyone on Council agrees on,” Prosper Mayor Ray Smith said in a news release. “The value of virtually all homes and property in Proper is rising, so increasing the exemption made perfect sense. People can take advantage of the higher exemption and either save money or redirect it to other purposes.”
Council member Curry Vogelsang agreed with Hodges and explained that the homestead exemption allows Prosper homeowners to target savings, specifically those who reside within the Town of Prosper.
“Those who have investments or other businesses will not receive the exemption on those properties,” Vogelsang said. “Only the primary residence within the town of Prosper will be eligible. We, on the council, are constantly looking at how much it costs to live in surrounding cities, like Frisco. We want to make sure that we are able to keep up with the infrastructure necessary for our growth in population but we also want to save money for our citizens where we can.”
State laws allow up to 20 percent in homestead exemptions, but percentages vary between cities. Frisco recently passed an increase in their homestead exemption, raising it to 7.5 percent. This still puts it behind Prosper, which is now offering 10 percent. A news release said of the 27 municipalities in Collin County, only eight offer a homestead exemption.
“My personal goal is to continue increasing every year,” Vogelsang said. “It is difficult as we continue to build roads and piping. We still want to maintain excellence. People know us by the quality of the staff and overall appearance of the town. We are going to continue to be committed to that as well. Everyone has different priorities and it is all about balancing that.”