by Nicole Bradford
If Pearland city leaders are going to move forward with raising the homestead exemption, they will need to act soon, city staff told council members during an initial budget discussion last month.
The city’s 2.5 percent homestead exemption has been a topic of discussion for the past several years as some council members have pointed out that neighboring cities, such as Friendswood, have exemptions of 20 percent.
“That’s your decision, but we need (a decision) sooner rather than later,” assistant city manager Victor Brownless told the council in April. “Really in May — we would need to make changes if you’re minded to do so.”
There are pros and cons to raising the exemption, which would lower property taxes on homes occupied by owners. The pros include stimulating the housing market and encouraging housing improvements.
However, it would also shift the tax burden to businesses and non-homesteaded property owners.
“There’s only about 10 percent of our tax roll that is commercial, so the impact on businesses is substantially more than the marginal benefit to the residential property taxpayers,” Brownless said.
