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TAA monitoring property tax issues for next session

Synopsis

Multifamily properties are noticing unusually high property valuations this year. The Texas Apartment Association is following a number of legislative efforts focused on property taxes, and it remains a top priority for the association.


Key takeaways

  • Valuation increases don’t necessarily equate to higher taxes, but there are concerns that rising taxes, insurance rates and other expenses, along with inflation, increases pressure on property operations and will further exacerbate the lack of affordable housing.
  • Several legislative committees have interim studies on property tax issues and TAA is monitoring their work closely and participating in a working group with other stakeholders to seek common ground for possible legislative fixes.
  • Property owners must also be proactive in appealing inaccurate valuations, following local government budget processes and communicating with state and local officials about the impact of property tax increases on housing affordability and their businesses.

With many multifamily properties across Texas receiving unusually high valuation increases this year, heading into the 2023 legislative session property tax reform is an issue on the agenda for many legislators, and it remains a top priority for the Texas Apartment Association.

While valuation increases don’t necessarily equate to higher taxes, there are concerns that rising taxes, insurance rates and other expenses, along with inflation, increases pressure on property operations and will further exacerbate the lack of affordable housing.

Several legislative committees have interim studies on property tax issues, including the Senate Committee on Local Government, the Senate Finance Committee and the House Ways and Means Committee, and TAA is closely following these hearings. See April Viewpoints article on interim charges.

In addition to being a major focus for the association’s government relations team, TAA also has an outside lobbyist who works solely on tax issues. In the 2021 legislative session, TAA monitored nearly 180 proposed bills related to taxes.

While there has been significant property tax reform during the past two legislative sessions (including the passage of SB 2 in 2019 which limited local government property tax revenue increases without voter approval), there’s more work to do on the issue.

TAA is currently participating in a working group with other property tax stakeholders, including commercial real estate, property tax consultants/attorneys and appraisal districts exploring whether there are areas of the law where there is consensus for changes.

The association also recently submitted an amicus letter in a motion for rehearing of a case that we think will have negative consequences for valuation appeals based on the equal and uniform protections in the state constitution.

There are also steps that individual property owners can take to help impact the process.

Property owners who feel like their valuations are not accurate should file an appeal and consider hiring a tax consultant to help with the process. Read more.

Regardless of valuation, the impact on property taxes is determined on the spending side. It is important for property owners to get involved in the budget process for local taxing entities. Finally, reach out to your state legislators and local officials to let them know how property tax increases are affecting your business and housing affordability for residents.

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