Texas homeowners had cause to celebrate last week when the state Senate unanimously passed a bill to raise the school property tax homestead exemption from $100,000 to $140,000.

Senior homeowners should have cheered the loudest because their homestead exemption will grow to $150,000 if the House concurs and voters pass the resulting constitutional amendment. The increased exemption would provide relief to homeowners who have endured some of the steepest property tax spikes in the country.

The structure of the relief, a fixed-dollar exemption, is the most fair approach. All homeowners benefit, but the more modest the property, the more generous the proportional tax break. For example, a 70-year-old living in a $150,000 home she owns would owe no tax for school maintenance and operation — the value of the exemption equals the market value of her property. A 70-year-old who owns and lives in a $1 million residential property would still pay school M&O tax on $850,000 of its value.

Lawmakers have more work to do, though. The homestead exemption only helps homeowners; renters also need relief. Tenants pay property taxes indirectly because landlords factor the cost of taxes into the rents they charge. In written testimony to lawmakers, the Texas Apartment Association reported that property taxes are “among the single largest expenses for rental housing owners in Texas.”

Renters didn’t benefit from the last round of property tax cuts in 2023, even though more than one-third of Texas households rent their homes. In most big cities, the proportion is higher. Fewer than half of all Dallas, Austin and Houston residents live in homes they own. These Texans may want to purchase homes, but the steep rise in rent costs and house prices during the pandemic, along with low inventories, put ownership out of reach.

Apartment rent increases have leveled off, but half of all Texas tenants still spent at least one-third of their income on rent and utilities in 2023. And while single-family house prices are stabilizing, higher interest rates continue to stymie renters hoping to buy a home.

During the 2023 Legislature, some lawmakers proposed allowing tenants to claim a state tax refund equal to a percentage of their annual rent. Also that year, Sen. Royce West, D-Dallas, suggested cutting the state sales tax rate from 6.25 cents to 5.75 cents per $1 spent — a way to distribute the state’s record budget surplus among a larger pool of Texans than just homeowners. That idea had the benefit of being easy to understand and administer.

State lawmakers should revisit and debate this proposal and others that would provide renter relief. We’d hate to see Texas become a state in which residents are locked into their current housing situation because of a skewed tax break. Tenants deserve relief on the taxes they pay indirectly through rent so they can save enough to become homeowners and pay their property taxes directly.

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