No motion was passed at the May 13 regular session and the item will be looked at again June 3.
What’s happening?
The homestead exemption reduces property taxes for homeowners, which does not include rental or commercial properties, Assistant City Manager Mark Wood said.
The city is discussing the homestead exemption prior to the budget being discussed in July due to Texas state law requiring the exemption be filed with the Tarrant Appraisal District before July 1, Wood said.
City staff expects an increase of 7% in property taxes for the 2025-26 fiscal year, which will generate additional revenue to pay for a $750,000 compensation study. This study will primarily go towards public safety to help Colleyville staff recruit and maintain police officers and firefighters and keep up with competitive rates from nearby cities, Wood said.
If the property tax increase is approved with the increased homestead exemption, then the average homeowner would save $2 on their 2025 property tax bill. The increased property tax revenue for the city would be $1 million if approved.
If the city does not increase the property revenue needed for public safety but still approves the homestead exemption increase, homeowners would see a $150 property tax cut, Wood said.
Additional details
The city approved its first homestead exemption last June at 7%. The city can reduce property taxes for homeowners up to 20%, according to state law.
“Our goal is to probably go to that 20%, [but] we didn’t want to do it all at once because it primarily affects businesses,” Wood said. “If you went to that full 20%, they would see [a] great impact all in one year.”
If the property revenue is increased for the city, then commercial property owners will pay $222 more than last tax year, according to city documents.
What's next?
City Council will make a motion on the 7% homestead exemption increase June 3. Upon approval, city staff will file the increased exemption with the Tarrant Appraisal District by July 1.
The budget and property tax rate will be presented in July for council consideration and will be adopted in September, Wood said.
