Local property taxes: Central appraisal districts

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Issue
Property appraisal is one of the elements that determine tax liability for real property in Texas. However, the appraisal process and local taxing-jurisdictions’ budget processes have become increasingly convoluted and difficult to understand.

Additionally, many commercial and residential property owners believe the appraisal and protest processes are not transparent, fair, or uniform across central appraisal districts (CADs). Many property owners also believe CADs either work for or are in cahoots with local taxing jurisdictions.

What does this mean for the real estate industry?
A transparent and improved appraisal process for commercial and residential property means a more stable and reliable real estate market.

The Texas REALTOR® position
The Texas Association of REALTORS® supports:

  • More state oversight of central appraisal districts and appraisal review boards;
  • The repeal of the “estimated property taxes” statement from the appraisal notice of value; and
  • Allowing for expedited discovery in appraisal value lawsuits.

The Texas Association of REALTORS® opposes:

  • The creation of government programs that will require property owners to disclose the sales price of real property purchases;
  • The creation of a new financial penalty on property owners who do not divulge the sales price of a real estate transaction to the government; and
  • Any changes to the “equal and uniform” appraisal laws to ensure property owners are treated fairly during the ad valorem appraisal process.

Legislative outlook
Several interim hearings were held to address many of the issues property owners in Texas have about the appraisal process. Many reforms in the appraisal process will ensure property owners have more trust in the appraisal process.

Historical perspective
Texans’ property tax bills are skyrocketing, and the state is looking at ways to provide relief. The Senate Select Committee on Property Tax Relief and Reform, chaired by Sen. Bettencourt, traveled across the state in the interim to hear from Texans about this critical issue and to propose solutions.

The select committee heard many potential solutions, including increasing the state’s share of public education funding, lowering the rollback rate, requiring an automatic election if a taxing entity exceeds the rollback rate, lowering the appraisal cap on residential homesteads, and expanding the appraisal cap to all real property.

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