Texas Property Tax Reform and Transparency Act

One of the largest expenses for real estate owners is property taxes.  Commercial property owners and their tenants (in the case of a triple net lease) are particularly sensitive to the increase use of this revenue source.  In an attempt to provide some relief, Texas Governor Greg Abbott signed the Texas Property Tax Reform and Transparency Act.  This Act is designed to slow the increase in property taxes, while increasing transparency of process.

The Act will require cities, counties and other taxing units to obtain approval by taxpayer vote before attempting to increase property tax revenue by 3.5% or more from the previous year.  It is hoped the additional cost and time consuming process of requiring a vote will make it more difficult for authorities to dramatically increase property taxes.

In order to effectuate transparency between taxpayers and taxing entities, the Act implements several measures that must be complied with, including  requiring Central Appraisal Districts to create an online database to show property owners how the proposed rate changes will affect their bills. Requiring an ability for taxpayers to express thoughts on any proposed increases on the portal, and requiring the District to include information on local public hearings on tax rate issues.

“Texas taxpayers are frustrated by rising property taxes. They are often confused about the process and many are scared of losing their homes," state Representative Dustin Burrows, the House sponsor of the legislation and a Lubbock native, said in a statement. Representative Burrows' office has calculated that the majority of Texans — more than 90% of county residents and 80% of city residents — live in municipalities that would be subject to the lower 3.5% election trigger.

It seems likely that property taxes will continue to be a significant source of revenue for governmental authorities in Texas.  Understanding how property taxes can affect your real estate investment helps make a better investment decision. Contact Rosenblatt Law Firm for more information.