Title
Consider and take action on an ordinance establishing a residence homestead exemption for calendar year 2015 and subsequent years pursuant to the Texas Tax Code and the Texas Constitution (Director of Finance)
Background:
If approved, the proposed ordinance will increase the local option homestead exemption for homeowners from the current 14 percent to 16 percent of appraised property value.
State Law allows the City to provide a local option homestead exemption of up to 20 percent of appraised value; the effect is to reduce the taxable value of a residential homestead by the determined percentage. League City presently offers a 14 percent homestead exemption, which was increased from 12% by Ordinance 2014-19. Of the Galveston County cities offering homestead exemptions (the list includes Galveston, Texas City, Friendswood, Kemah, Clear Lake Shores, Tiki Island and BayouVista), League City is the only one to offer less than 20 percent (cities including La Marque, Hitchcock, Jamaica Beach, Dickinson and Santa Fe offer no homestead exemption). In line with the Council's priority of reducing local homeowners' property tax burden, as part of the effort to get the Municipal Development District passed in November of 2015, this proposal would reduce property taxes by $25.07 on the average League City home (value of $210,000) for an estimated $578,000 total savings to League City property taxpayers. These savings would be in addition to the cumulative and ongoing savings being realized by League City property owners as a result of Council's five consecutive reductions in the property tax levies in fiscal years 2011-2015. The tax rate was reduced from 63 cents in fiscal 2011 to 59.7 cents in fiscal 2013 plus the homestead exemption increase from 10 percent to 12 percent for fiscal 2014.
For fiscal year 2015 (the 2014 tax year), total property tax revenue is estimated to be $34.4 million. For this year, the tax revenue reduction due to the homestead exemption wa...
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