A 10 percent discount in the taxable value of residential properties is assured to those eligible Prosper homeowners who take advantage of the Town’s homestead exemption, now entering its sixth year. Prosper’s homestead exemption is among the most generous in the North Texas area and applies to homes in both Collin and Denton Counties and will remain at 10% unless changed by Town Council action. Even so, residents who’ve not already applied for the exemption must actively request the exemption from their respective appraisal districts. Those who’ve already done so in previous years, need not reapply.
Homeowners who have not previously applied for a homestead exemption should fill out the necessary forms from their respecting appraisal district between January 1 and April 30. The original exemption was passed in 2015 at 7.5 percent, subsequently increased to 10 percent in 2017.
The exemption, by state statute, is applicable only to homes that serve as the primary residence for the applicant, and only one exemption is applicable. The minimum reduction in value of residential properties is $5,000. The exemption is not applicable to commercial concerns or income-producing properties.
While tax bills for Prosper residents include levies by several entities, the homestead exemption lowers the exposure for property taxes levied only by the Town of Prosper.
“Homeowner tax relief is a topic that remains a Council priority,” says Mayor Ray Smith. “The effective management of the Town finances and conservative way that funds are allocated provide us the latitude to give homeowners this benefit.”
Prosper’s 10 percent exemption is the second highest in Collin County. Of the 27 municipalities in Collin County, only eight offer a homestead exemption. The tax rate of 51 cents per $100 valuation, was decreased from 52 cents per $100 valuation in the current tax year. The rate divides property tax revenue into roughly 33 cents for the General Fund, used for maintenance and operation, and 18 cents for the Interest and Sinking Fund, used to pay debt service.
The typical home in Prosper is valued at $563,531, and with the exemption in place, the tax exposure will decrease by $56,353 saving the homeowner about $287 in ad valorem taxes to the Town.