Dallas raises property tax exemption for homeowners over 65 or disabled

Dallas homeowners who are disabled or 65 and older will be eligible for a modest increase in the amount of money they can exempt from their property taxes next year.

The Dallas City Council on Wednesday unanimously approved an 8% increase in the amount those homeowners can exclude from their property tax valuation to $115,500 from the current $107,000 exemption.

City officials say senior and disabled homeowners with an average home value of $328,453 would pay $1,141 in city taxes, working out to a $63 annual reduction with the change. That tally also includes the standard 20% homestead exemption, which can be applied for every Dallas homeowners’ primary residence. That 20% is the highest amount allowed by state law.

The over 65 and disabled homeowner exemption increase would apply to more than 74,500 homes in the city and is meant to give more tax relief to residents who are typically on fixed incomes in the face of raising property taxes.

At 77.3 cents per $100, Dallas has one of the highest property tax rates in the state.

In 2021, Houston, San Antonio and Austin all had property tax rates under 57 cents per $100 of valuation. Among major Texas cities, only El Paso, at 90.7 cents per $100 valuation, has a larger tax rate than Dallas.

“High property taxes can make it difficult for anyone, but there’s a recognition that seniors and people with disabilities, many who are on a fixed income, are unable to absorb into their budget the property value increases we’re seeing in Dallas,” said council member Cara Mendelsohn before the vote.

Mendelsohn said the exemption increase could mean the difference between some homeowners being able to afford groceries or prescription medication and she was one of several council members who expressed support for lowering Dallas’ overall property tax rate in the next city budget.

Property taxes are the city’s largest revenue source, bringing in close to $1.2 billion in a year. Of that amount, 73% or $877 million, goes toward the city’s general fund and the rest toward paying city debt.

According to city records, $46.8 billion in property value is currently exempt from taxes in Dallas. That represents about $361 million in revenue the city isn’t getting.

That includes homestead, historic and environmental exemptions, tax abatements and properties completely exempt like government buildings, churches and schools.