By Brittany Anderson
KYLE — As costs continue to rise everywhere, including property values, a potential homestead exemption might be able to offer a satisfying tax break for Kyle homeowners.
During the Kyle city council meeting on June 7, the council discussed implementing a general homestead exemption in Kyle, and unanimously approved a direction to staff to incorporate it into its financial analysis.
With the upcoming budget work sessions — the next one will take place on July 7 — council member Dex Ellison pointed out that this is an ideal time to discuss implementing an exemption.
The item was brought forward by council member Yvonne Flores-Cale, who said that doing so would “bring some relief to already financially trying times,” explaining that the state of Texas allows for a city to exempt up to 20% of a home’s value, but also has the option to set an amount under 20%, but at least $5,000.
“Due to the increase of home appraisals, and seeing cities and counties such as San Marcos and Williamson County create and raise their homestead exemption, I want [council] to decide whether the city should implement an exemption for our residents,” Flores-Cale said.
Hays County provides a general residential homestead exemption on taxes it collects, but each jurisdiction within the county can provide its own exemptions, including the city of Buda, Austin Community College or one of the emergency service districts.
Council member Dex Ellison said Kyle currently only has a $30,000 homestead exemption for residents over the age of 65, and that back in October 2021, finance staff gave council five property tax exemption options for residents over the age of 65, and 10 options for a general residential homestead exemption, showing an amount of $5,000 and increasing in $5,000 increments up to $50,000.
City manager Scott Sellers said that they are looking to bring the exemption forward alongside road bond proposals, of which consist of nine “very large” road projects. While the price of the bond has not been finalized, Sellers said that staff will have to figure out how to best consider homestead exemptions in tandem with the bond without raising the tax rate too much.
“We’re at an offset here; we reduce on one side of the ledger, but yet we ask on another for these road bonds,” Sellers said.
Sellers also pointed out that the city’s tax rate has steadily declined, but the taxable value as a city has continued to increase.
Mayor Travis Mitchell said that this is the “appropriate time” for staff to incorporate proposals into its analysis that includes potential homestead exemptions, while also deciding what the tax rate is going to be and how much debt it is going to fund.
“I’m not sure it was part of the scope of your budget process or analysis … that will absolutely put tension into what our rate is, what our bond is, and other things where that tension is,” Mitchell said. “It makes it harder to make that decision, but also gives us the ability to make that decision and potentially pull from elsewhere.”
Council’s vote approved staff to incorporate a possible homestead exemption into its financial analysis as it relates to setting of the tax rate, calling for bond and setting of the budget.
