To: Mark R. Hafner, City Manager
From: Aaron Rector, Director of Administrative Services
Subject:
Title
Consider an ordinance approving a residential homestead property tax exemption increase of 2% for a total exemption of 10%, as authorized and defined by Section 11.13(n) of the Texas Property Tax Code in the City of Keller, Tarrant County, Texas; providing a penalty; and authorizing publication.
Background:
In 1986, the City of Keller approved a homestead exemption of 1% which was the exemption rate until 2016. The homestead exemption was increased to 4% in 2016 and increased again to 8% in 2017. The exemption reduces the taxable value of a residential property with a homestead exemption by the greater of 8% of taxable value or $5,000. The proposed ordinance would increase the exemption by 2% for a total of 10%. The proposed exemption would reduce the preliminary FY 2018-19 (Tax Year 2018) taxable residential homestead value from $349,585 to $342,593 or a taxable value reduction of $6,992. If approved, the exemption would be included in the Fiscal Year 2018-19 (Tax Year 2019) taxable value calculations.
Financial Impact:
Because the exemption will be applied to an upcoming budget year, staff will modify budget projections to accommodate the approved exemption.
Based upon early taxable value estimates, every 1% increase of exemption would reduce the potential levy by approximately $192,905. Increasing the exemption by 2% would reduce the potential levy by $385,810.
Citizen Input/Board Review:
Not applicable
Legal Review:
Not applicable
Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial
Council Action:
Consider approval of a homestead exemption of 10%, which is an increase of 2% from the current exemption.