Ending the month-long stalemate, the Texas House on Thursday approved the landmark property tax relief bill that was passed by the Senate a day before. The $18 billion Texas property tax relief bill now heads to Gov. Greg Abbott for final approval.

Texas Property Tax Relief Bill: What It Includes

Thursday evening, the House passed the Texas property tax relief bill, ending the second special session that Gov. Abbott called this summer to reach a consensus on property tax relief.

“I look forward to signing this legislation into law to provide Texans with the largest property tax cut in Texas history,” Gov. Abbott said.

Specifically, the Republican-led House and Senate signed off on three bills that make up the package –  Senate Bill 2 (proposed property tax cuts), Senate Bill 3 (a franchise tax relief bill) and House Joint Resolution 2 (a constitutional amendment needed to authorize the tax cuts).

The $18 billion Texas property tax relief bill raises the homestead exemption, limits appraisal increases for commercial and non-homesteaded properties, and sets aside billions for school districts to encourage them to reduce property taxes.

A significant amount of local property taxes is diverted toward local public school districts. The state law requires property owners and state government to contribute most of this money. However, under the bill, more money for public schools will come from the state, thereby easing the burden on property owners.

In addition to the nod from the governor, this bill also requires a change to the constitution. Texas voters will have to approve it during an election this November.

Democrats were unsuccessful in getting relief for renters, teacher pay raises, and more money for public education. The state leaders, however, expect the governor to call another special session in October to work on education reforms and teacher pay raises.

How Will It Benefit Texans?

Nevertheless, this Texas property tax relief bill will undoubtedly offer big relief to residents once fully approved. Although the state has no income tax and a middle-of-the-road sales tax, it has some of the highest property taxes in the nation.

A recent poll by the Texas Politics Project at the University of Texas at Austin found that 40% of Texans expect a jump in their property tax bills next year.

About 5.7 million homeowners in the state are estimated to benefit from the $18 billion Texas property tax relief bill. The bill will use about $7 billion to reduce the property tax rate by 10.7 cents for every $100 of value. Further, more than $5 billion will go toward raising the homestead exemption from $40,000 to $100,000.

The bill will also benefit businesses and commercial real estate owners going forward. Small businesses won’t be required to pay the state franchise tax, while some commercial properties will be subject to tax appraisals at 20% for three years.

As of now, it is unclear how much this new bill would lower tax bills for individual properties. It is, however, estimated that an average homeowner with a $300,000 home will save around $1,300 next year.

This article originally appeared on ValueWalk

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