LEAGUE CITY — Residents will get an extra 2 percent on their homestead exemption when it comes to paying their property tax bills next year.
The City Council on Tuesday gave final approval to increasing the homestead exemption to 14 percent.
The new 14 percent homestead exemption would, on average, reduce a homeowner’s property tax payment to the city by about $22 a year. The average house value in the city is $184,000, city officials said.
Homeowners who declare a homestead exemption receive a 14 percent reduction in the taxable value of their property.
For example, a $100,000 house in League City with a homestead exemption would have its property value reduced by $14,000 for property tax purposes.
Even with the increased exemption rate, League City still offers one of the smallest tax breaks on homesteaded properties in Galveston County. All of the other cities that offer homestead exemptions do so at a rate of 20 percent.
This is the second straight year that the council approved increasing the homestead exemption rate.
Last year, the council raised the rate from 10 percent to 12 percent.
Councilman Dennis OKeeffe was the only member of the council to balk at the increased exemption.
He argued that the increased exemption would “cost” the city $500,000 in tax revenue this coming year.
Combined with the $500,000 in less taxes collected from the last increase, he argued that combined with increased city debt service, the real cost of the tax break for homeowners cost the city nearly $3.6 million during the next several years.
But Mayor Tim Paulissen and others on the council questioned OKeeffe’s math abilities. Noting that OKeeffe didn’t account for the likely increase in appraised values on property in the city and more than 1,100 new houses constructed.
Paulissen said the increase in the exemption rate was the “least we can do” to help reduce homeowner’s tax burdens since most homeowners expect higher valuations this year.
Those increased values mean a higher tax bill even if the city doesn’t change its tax rate.
The increase in revenues form higher appraisals would offset any suggested “losses,” the mayor said.
Councilman Andy Mann suggested that if the city was unable to find $500,000 in savings within the budget to offset the reduction in taxes, “then why are we here?”
Councilman Dan Becker made a dig at OKeeffe’s expense, suggesting that the new employee suggestion incentive program — which OKeeffe also opposed — may on its own offer enough savings to offset the lost tax revenue.