Council begins drafting tax abatement ordinance

Pearsall city councilors are considering adopting an ordinance that would offer property tax incentives to owner-occupants who intend to build or remodel their homes.

The ordinance is aimed at furthering local development.

Property tax abatements directly reduce the amount of taxes owed for a specified period and can be offered as an incentive to encourage the construction or rehabilitation of residential structures.

“I personally would like to see more houses built,” Councilor James Leal said during a Tuesday, June 13, meeting. “Other communities have designated spots for mobile homes. Studies show that mobile homes decrease the value of homes, considerably.”

According to City Secretary Krystal Garcia, the city approved 11 traditionally built homes between May 2021 and May 2023, and three remain under construction while the rest are complete. She also reported that 19 mobile homes have been approved by City Hall with three more on the table for consideration that evening.

City Hall also received four conditional use permit applications last week.

Leal said he would like to implement a program that offers tax abatements based on masonry of the home and proposed some starting numbers.

“Lets say they have 24 percent or less [masonry], we would give a three-year tax abatement,” the councilor said. “If there is 25 to 49 percent masonry, they could get a four-year tax abatement; if it is 50 to 75 percent it would be five years;  75 to 99 percent six years; and if it is a hundred percent, a seven-year abatement.”

Leal said he would consider an abatement for those who rehabilitate their homes, adding that a remodel worth over $30,000 could be eligible for a one-year tax abatement.

“We are trying to incentivize the upkeep of someone’s home,” Leal said of his proposed calculations for the ordinance. “Which brings the home up and adds to the value of it. In the long run, we are increasing our tax base.”

Councilors approved authorizing the city manager, city attorney, mayor and Leal to draft an ordinance and present it at a later date.