How the Prop Q Tax Rate Will Impact Your Austin Property Taxes

Here’s what to know about the Prop Q tax rate proposal in the City of Austin’s upcoming general election:

• Prop Q is a proposition on the City of Austin’s November ballot to increase the city tax rate to $0.574017 per $100 of taxable property value.
• If approved, the average homeowner could pay an additional $302.64 in city taxes per year. Even if not approved, the city tax rate will still increase from $0.4776 to $0.524017.
• The funds raised will be used to address the city’s budget deficit and increase support for various public services and city infrastructure.
• You can lower your overall property tax bill by lowering your assessed value. This is done by applying for all eligible property tax exemptions and protesting your property taxes.
• Gill, Denson & Company is a professional property tax protest company, here to protest your property’s tax-assessed value on your behalf, seeking the highest possible reduction.

What Is Prop Q?

Prop Q is a proposition on the November ballot in the City of Austin that would increase property taxes to fund various public services. This is being proposed to help address the city’s $33.4 million budget deficit. If approved by voters on November 4, there would be a 5-cent increase for every $100 of personal property value. This can be confusing if you don’t know what you’re looking at.

In Texas, cities can raise property taxes by 3.5% each year without voter approval. Prop Q is actually proposing a 5-cent increase above the “voter approval tax rate,” which is $0.524017. If approved, this would make the new City of Austin tax rate $0.574017 per $100 taxable value, which is technically almost a 10-cent increase from last year’s rate. If not approved, it will only increase to the $0.524017 rate.

What Will the Funds Be Used For?

Texas has no state income tax, which means the funds for public services are made up for in part by property taxes. The Prop Q tax rate adjustment is specifically designed to address critical funding gaps across essential public services in Austin, given rising costs for labor and services. The roughly $101 million in annual revenue generated by the increase will stabilize and expand key city programs, with a heavy emphasis on public safety, homelessness services, and parks.

The proposed allocation includes, but is not limited to:

• Public Safety & Health: Over $11 million in dedicated funding to fully restore the Austin Fire Department’s (AFD) overtime budget, bolster AFD’s wildfire mitigation efforts, increase EMS staffing (including 62 sworn positions), and restore crucial public health grants and social services contracts.
• Homelessness & Housing Affordability: Nearly $32 million in comprehensive funding for the city’s homelessness strategy, including substantial investment in Permanent Supportive Housing (both new and existing support), new beds for Rapid Rehousing, support for emergency shelter operations (including the Marshaling Yard), and increased street outreach staffing.
• Parks & Environment: Approximately $8 million for enhanced Parkland Maintenance and Natural Land Restoration, including dedicated funding for wildfire prevention.
• Community & Arts: At least $2.5 million for the Creative Space Assistance Program and other core contracts supporting community and arts initiatives.

You can read more about how the proposed budget will be used at AustinTexas.gov.

How Will It Impact Your Property Taxes?

So, the City of Austin’s proposed ad valorem tax rate is $0.574017 per $100 taxable value. This increase will mean the average homeowner pays an additional $302.64 in city taxes per year. The actual increase you see on your bill will vary depending on your tax-assessment base. The chart below shows the difference in city taxes owed based on the approved rate and a property’s taxable value.

If your home is valued (for tax purposes) at $500,000, then you could see an increase of about $250 with the Prop Q rates. If your home is taxed at a $900,000 value, the increase would be about $450. This increase is in comparison to what you would pay if Prop Q is not approved.

It is important to note that this increase does not apply to every single tax rate on your property tax bill. The tax rates for school districts, special-purpose districts, and other local entities are set separately. Here is a great explanation of where your property tax money goes.

What Can You Do to Help Lower Your Tax Bill?

Regardless of whether or not Prop Q passes, your City of Austin taxes will increase, which means your next property tax bill will be higher. However, there are steps you can take to potentially decrease your bill. First, make sure you have applied for all eligible property tax exemptions to lower your taxable base value.

Then, consider protesting your property taxes with a professional company like Gill, Denson & Company. We’ll help you petition the county to lower your tax-assessed value, which lowers your overall property tax burden. By using a customized method, we find the best reason(s) for protesting your property value and pursue the highest possible reduction. When you reduce your assessed value, you reduce the amount of property taxes owed across the board, city and otherwise.

Ready to reduce your property tax bill, even when tax rates increase? Get started with Gill, Denson & Company today to see how much you could save on your next bill.