In 2023, faced with growing public frustration over rising property tax bills, the Texas Legislature approved a measure to raise the homestead exemption for school property taxes from $40,000 to $100,000.
In signing the bill expanding the school homestead exemption, Texas Gov. Greg Abbott touted the $18 billion in property tax relief statewide as “the largest property tax cut in Texas history.”
For El Paso taxpayers, the 2023 tax relief package – which was approved by Texas voters that year as an amendment to the state Constitution – has yielded modest reductions in tax bills the past two years, an El Paso Matters analysis shows. That’s largely due to two factors – rising property valuations driven by escalating home costs that ate into the expanded school homestead exemption, and increasing tax bills by other local governments.
The expanded school district homestead exemption took effect in 2023. In 2024, the property tax bill on an average-value El Paso home was down by 3% to 7% over the 2022 tax bill, the last year before the increased exemption, the El Paso Matters analysis showed. The impact varies by school district.
For the analysis of the impact of the expanded homestead exemption for school taxes, El Paso Matters used El Paso Central Appraisal District records of average home valuations in various government entities, and tax rate records from the local governments that comprise most El Paso property tax bills – the school districts, city of El Paso, El Paso County, University Medical Center of El Paso and El Paso Community College.
The average taxable home value countywide was about $206,000 in 2024. For the three largest local school districts, average taxable values were $167,000 in Ysleta Independent School District, $218,000 in El Paso ISD and $221,000 in Socorro ISD.
The impact of the expanded homestead exemption on individual homeowners depends on the change in home valuations between 2022 and 2024. Homes with taxable valuations that rose by the maximum 10% annually in 2023 and 2024 saw less benefit from the homestead exemption reduction than homes with valuations that grew at slower rates.
School property taxes drop sharply
The main target of the increased homestead exemption – school property taxes – did result in significant savings for the owner of a typical home in each of El Paso’s three largest districts. The property taxes lost by school districts because of the exemption decrease were replaced by other state funds.
The school tax bill on an average home in El Paso, Socorro and Ysleta ISDs decreased by $500 to $600 between 2022 and 2024, the El Paso Matters analysis showed. That’s a reduction of 28% to 62%. Ysleta ISD offers an additional 20% exemption on top of the state-mandated $100,000 exemption, and generally has lower property values than El Paso and Socorro ISDs.
The impact of the extra $60,000 homestead exemption was blunted somewhat by rapidly rising home values as the cost of housing increased. In El Paso ISD, the average taxable home value jumped by more than $52,000 between 2022 and 2024; in Socorro ISD it grew by almost $36,000; in Ysleta ISD the growth was almost $28,000.
Property tax bills from other governments
The expanded homestead exemption passed by the Legislature and approved by Texas voters applied only to school districts, which make up the largest proportion of the property tax bill for most homeowners.
The change didn’t impact the homestead exemptions on other taxing entities. In El Paso County, the city and county governments have offered $5,000 homestead exemptions for many years, while University Medical Center and El Paso Community college don’t offer homestead exemptions.
In Texas, local governments rely heavily on property taxes to fund operations, especially city and county governments.
Outside of school taxes, property taxes by other governments in El Paso rose after the school tax break was approved.
Between 2022 and 2024, the tax bill on an average home for those four entities has increased by 6% to 24%, depending on the school district, with the tax to fund county government increasing the most. The national rate of inflation between 2022 and 2024 was about 6%.
The increase in the tax bills on average homes for the city, county, hospital and community college offset 43% to 75% of the school tax savings generated by the increase in the homestead exemption, depending on the school district, according to the El Paso Matters analysis.
What will happen in 2025
The Texas Legislature, still facing concerns about property tax bills from constituents across the state, passed three major property tax reforms that must be approved by voters in November. That includes another increase in the homestead exemption for school property taxes, from $100,000 to $140,000. The state once again will use other revenues to replace the money school districts will lose from the increased exemption.
That will once again lower school property tax bills. In fact, tens of thousands of El Paso homeowners whose properties are valued below $140,000 will not have to pay any school taxes.
The precise impact on the average El Paso homeowner will become clear this summer as local school districts adopt their new tax rates. The El Paso Central Appraisal District will have estimates on average taxable values for each government entity later this month, said David Stone, the agency’s deputy chief appraiser.
Critics of the state approach to property tax relief – which has relied heavily on massive budget surpluses in 2023 and 2025 to lower property taxes and increase state contributions to schools – may not be sustainable over the long term.
Other taxing entities also will set their tax rates this summer. The city government has proposed a plan, which still must be approved by City Council, that would add about $104 to the tax bill on an average home. Most other governments have not yet released property tax proposals.
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