Texas recently unveiled a massive property tax cut package that’s set to provide homeowners with $18 billion in tax relief over the next two years. However, there is significant debate on whether this relief will trickle down to renters, with a variety of factors at play. You can find a detailed report on this by [Houston Chronicle](https://www.recenter.tamu.edu/news/newstalk-texas/?Item=30430).
The main debate stems from the diverse dynamics of each local housing market. In areas with a high number of vacant rentals, it would theoretically make sense for landlords to lower rent or offer other incentives to attract tenants given the reduced tax burden. This would prevent the properties from standing vacant.
However, in scenarios where there are no market pressures, landlords may not pass the tax relief down to renters, specifically if the market demands housing at higher or current rates. This has particularly been the case in recent times, where a severe housing shortage has been noted in many markets, meaning landlords may not see a reason to lower rents at all.
In the macro view, renters occupy about 3 out of every 8 households in Texas, highlighting the sizeable portion of the population that this debate directly affects. Moreover, in Texas’ largest cities, renters make up over half the households. Therefore, the eventual outcome of this debate has the potential to have far-reaching effects on the state’s housing landscape.