On June 28, the Prosper Town Council unanimously voted to increase the homestead exemption from 10% to 12.5%. The new exemption goes into effect with the January 2023 tax bills. Frisco recently made a similar decision earlier this month.
According to an official Prosper statement, the 2.5% increase results in approximately $778,000 in property tax savings.
“With the increase in home values and property taxes in Prosper, the Town Council has carefully listened to the needs of our residents who qualify for this homestead exemption,” said Prosper Mayor David Bristol. “We believe now is the right time to provide this 12.5% relief to those qualified homeowners with homestead status. This will also allow for us to maintain a stable tax rate."
The current homestead exemption went into effect in 2017, a three percent increase from the 7% homestead exemption established in 2015. Since then, property values — and taxes — have risen. As Local Profile reported, Collin County is now called "unaffordable."
The following are necessary to qualify for a homestead: Own the property on January 1, occupy the property as principal residents on January 1; and have not claimed a residential homestead exemption (neither you nor spouse) on any other property.
In Collin County, Prosper is not alone in recently increasing the homestead exemption. Earlier this month, the city of Frisco also voted to give residents property tax relief and put in place a senior tax freeze. The homestead exemption will be increased to 12.5% from the current 10%.
“Rising home values, as well as inflation, coupled with our aging city, market conditions and our strong, financial policies, make now a good time to implement a ‘senior freeze,’” Jenny Hundt, director of budget and strategic planning, is quoted as saying. “Those factors also make it possible for us to increase our homestead exemption to benefit all our homeowners.”
According to The Dallas Morning News, the new Frisco homestead exemption will save homeowners $2.2 million. The exemption goes into effect for the property taxes due in 2023.