June 15, 2022



Homes values in Georgetown have increased exponentially over the past year, leading to increased tax bills for homeowners in the area.



Homestead exemption rising



Homeowners with a primary residence in Georgetown are set to receive some tax relief, with city council Tuesday approving a proposed increase of the city’s homestead exemption rate on first reading. A homestead exemption is a property tax break provided to qualifying homeowners who used their local property as a primary residence on January 1 of the tax year. Through the city’s proposal, the city’s homestead exemption rate will increase from $5,000 or 3 percent of the home’s value, to $5,000 or 5 percent of the home’s value.


According to Erica Young, the city’s senior budget analyst, with the new exemption rate, the average Georgetown homeowner would see an about $30 decrease in their city tax bill. Georgetown’s exemption rate will match the rate set by Williamson County Commissioners last month on the county’s portion of the tax bill. “The recommendation matches what we saw from the county [last month],” City Manager David Morgan said, noting that the city is expected to decrease its tax rate by several cents this fall as well, ahead of the 2022-23 fiscal year.


According to state law, cities are not permitted to set a tax rate that would increase tax revenues by more than 3.5 percent compared to the year prior, unless approved by residents through an election. Due to the vast increase in appraised home values throughout Georgetown, the city will need to decrease its tax rate to comply.


By increasing the homestead exemption, Mr. Morgan said the city will slightly reduce its tax revenues, making it easier for the city to comply without an
election. “Right now, given the strong [taxable] value increase, we anticipate a several cent reduction in the overall tax rate,” he said. “So basically, what this [exemption does] is, if you make [the exemption] higher, the amount the tax rate decreases will lessen compared to what you would see if [city council] keeps it at 3 percent.”


Increased values


While the appraised value of a home is capped at a 10 percent increase each year, Ms. Young said the total market value for all properties in the City of Georgetown increased by more than 40 percent from 2021 to 2022. Georgetown’s market value was estimated at $19.5 billion in 2022, compared to $13.6 billion in 2021, according to Williamson Central Appraisal District data presented in the city’s presentation Tuesday. That’s a $5.9 billion increase in one year, and represents a more than $10 billion increase since 2017. Residential homesteads specifically in Georgetown saw a 51 percent increase over the past year, according to the data, going from $8.29 billion in 2021 to $12.54 billion in 2022. Ms. Young said more than 90 percent of homesteads in Georgetown hit the 10 percent appraised value cap this year, or about 17,600 of the city’s 19,100 homesteads.


Impact to homeowners


By increasing the exception rate from 3 percent to 5 percent, an average Georgetown homeowner’s exemption would be about $18,000, compared to $10,800 without the change, according to the presentation. That change would reduce an average tax bill by about $30.

For the city, it would collect about $346 million less in tax revenues due to the exemption at the new rate, compared to about $280 million in revenues at last year’s exemption rate. However, because of the amount appraised values increased, overall city tax revenues are not expected to be impacted by the exemption, Mr. Morgan said. The homestead exemption must formally be approved by city council by July 1 for it to go into effect for the next fiscal year. A second reading and vote for approval is scheduled for June 28.