As Texas debates property tax reform, a proposal targets relief for first-time homebuyers
Property tax reform in Texas is shaping up to be one of the most debated issues of 2026, as many homeowners continue to express frustration with their tax bills.
That dissatisfaction persists despite constitutional amendments approved by lawmakers and voters aimed at lowering school property taxes.
Property tax reform takes center stage in Texas politics
Gov. Greg Abbott has made property tax reform a central part of his reelection campaign, proposing a constitutional amendment that would eliminate school property taxes, cap homestead appraisal increases at 3% — down from the current 10% — and limit appraisals on all properties to once every five years.
Lt. Gov. Dan Patrick has proposed increasing the homestead exemption again and lowering the age at which school property taxes are frozen from 65 to 55. Both leaders have also called for tighter limits on local government spending.
Proposal aims to help first-time homebuyers with affordability
Ryan Chismark, a partner at Meritax Advisors in Frisco, spoke with CBS News Texas about potential reforms and said the state should consider a property tax incentive for first-time homebuyers.
"They're the ones that have the biggest issue with affordability," Chismark said. "I think a lot of viewers would be surprised to hear that most first-time homebuyers are between the age of 35 and 38 in Texas. So, I believe that owning a home is core to building a strong family."
Chismark said his proposal would allow first-time buyers to phase into taxation gradually.
"My idea is very simply that we give an exemption to first-time homebuyers. They apply the same way they would with a homestead. Maybe they check a box. We'll figure it out," he said. "They phase into taxation. So, the first year maybe they have an exemption of M&O (maintenance and operations part of school tax), and then it phases out over time the same way these other seniors are phasing out of taxation, the homebuyers are phasing into taxation. In the middle we can continue to expand the homestead exemption so everyone gets relief."
With affordability continuing to be a concern, Chismark said the approach would make homeownership more attainable early on.
"It's the natural passing of the baton. But we've left first-time homebuyers out of the discussion," he said. "They're the ones that are taking all their nest egg and putting it into this home. They have the biggest squeeze in affordability. Let's help them out."
Concerns raised over appraisal caps and long-term impacts
Chismark has written a 53-page report examining property tax systems in other states.
While acknowledging that Abbott has overseen more property tax reductions than any previous Texas governor, he warned that proposed changes to the appraisal system could create problems seen elsewhere.
"He has a traditional what we call cap-and-cut plan," Chismark said. "So, in that paper, I identified a centralized place where we could go through case studies of states that have implemented cap-and-cut policies: cap assessments, cut spending, five-year reassessment cycles."
"What he (Abbott) proposed has all failed in every instance now," he said.
Chismark said those systems have led to inequities between long-term homeowners and new buyers.
"If you have a first-time homebuyer, they are buying an asset close to market value," he said. "Whereas if somebody, let's say, bought their house in 1995 and they have caps at 3% a year, they have not kept pace with inflation."
"So, what you'll see is their home value is down here, whereas the new homebuyer is way up here," he said. "They're paying inherently more for a house that might be across the street."
He said that imbalance shifts the tax burden onto new buyers and reduces funding available for infrastructure.
Calls for transparency and long-term funding solutions
Records from the Texas Comptroller's Office show that school property taxes were lower statewide in 2023. However, the same records show property tax revenues collected by cities, counties and special districts increased that year.
Some homeowners say they feel the government effectively owns their property because even after paying off a mortgage, they must continue paying property taxes.
"That's why the sound bite of cap and cut has worked well, and it has gotten traction," Chismark said. "But it sounds good, and it doesn't work, and it never has."
"So, on the local spending side, let's address that," he said. "I don't think we have enough transparency into local spending."
Chismark also proposed creating a new fund for K-12 public education, modeled after higher education endowments and long-term revenue strategies used in other states.
"Let's have 30-year long-term strategic planning and a dedicated revenue source, not a two-year, 'we have a surplus, what do we do with it' discussion," he said.
"If we are budgeting and planning future decisions and making future obligations with short-term revenue, that's a mistake," Chismark added. "It's certainly a mistake if we're talking about the eighth-largest economy in the world."
