Feature Photo Credit: Daemmrich/CapitolPressPhoto/PoolState Rep. Phil Stephenson and others say the Pledge of Allegiance as the 87th session opens in Austin
Okay ladies and gentlemen, it is 2021 already! We are all expecting this year to be better than last year, which is (in my opinion) an understatement, because how could any year be worse than last year?!
I have always thought of myself as a “hunter/gatherer,” and that is how I am approaching these articles about TREPAC. I hunt and gather information that might be of interest to you, and try to include a few points that you could consider sharing with your networks. But one challenge with publications is providing current information in the fast-moving world of public policy.
The sessions kicked off on Jan. 12, so we will just all go down this road together! Everyone is expecting the 2021 Texas legislative session to be unlike any other. We still do not know how the legislators will do their business, as we are up to our eyeballs with the COVID-19 pandemic. The Capitol was opened to the public in early January, but it’s not clear yet if there will be opportunities to present our cases to members of the legislature in person, via Zoom, by e-mail or by carrier pigeon.
One of the most important jobs of your professional association is to advocate for issues important to property owners and issues that are important to REALTORS®. Texas REALTORS® is the largest and most successful advocacy organizations in the state of Texas.
As of Jan. 5, our state association is monitoring 334 bills that have been filed for the upcoming 87th legislative session. These bills and many more yet to come are being watched because of their potential impact on Texas real estate. That’s a lot of watching, and we are still early in the year! You can download a copy of our association’s legislative priorities at www.texasrealestate.com/issues (where much of the information for this article was obtained). I’ll highlight a few of our priority issues here.
Issue: Texas real estate in demand, and the increase in value is what makes property in our state such a great investment.
The state’s homeownership rate reached an all-time high of 70 percent in September 2020 (and you thought nothing good happened last year!), according to the Texas Real Estate Research Center at Texas A&M University.
Some lawmakers in the past have sought to lower the current 10 percent appraisal cap rate to 3 percent or 5 percent under the guise of limiting the property tax bill of a residential homestead. Unfortunately, these proposals nearly guarantee an automatic annual increase in a property tax bill. Appraisal caps also shift the property tax burden of higher-valued properties to middle-class homes, which typically do not appreciate in value at the same rate as higher-priced homes.
Texas REALTORS® Position: Texas REALTORS® opposes efforts to reduce the property-tax appraisal cap from its current level of 10 percent. We also oppose the imposition of an appraisal cap on commercial properties.
Sales Price Disclosure
Issue: Some appraisal districts, cities and counties argue for full disclosure of all real estate sales prices to establish the value of real property in Texas. There are many problems with basing value, especially taxable value, on the sales of a real property. Seller considerations and special concessions are not taken into account for the final sales price, nor are the nuances of irregularly-sized lots or custom-built homes.
Other problems arise with commercial properties, which may include a business and/or trade fixtures, value of long-term leases and properties where mineral rights are included or excluded from the sale.
Texas REALTORS® Position: Texas REALTORS® opposes all legislative efforts to require the disclosure of sales price information because: Sales price is not necessarily a good indicator of taxable value, it is an invasion of privacy (it is nobody’s damn business how much I paid for my house), and it could pave the way for a new real estate transfer tax in Texas, as most states that require sales price disclosure use it to compute tax liability for the transfer of real estate.
In last month’s column and this month’s, I have talked about six issues that are important to property owners and REALTORS®. That is what TREPAC does, it advocates on behalf of property owner rights and REALTOR® professionals by supporting pro-real estate candidates.
Just a couple more pieces of information before I wrap this up. Lots of other issues may be brought up in this session: education funding, protection for businesses against COVID-19 lawsuits, broadband connectivity and new sources of revenue generation, just to name a few.
Texas REALTORS® and TREPAC will watch the session (maybe more than one) and keep all of us informed if any issues can have a negative impact on us, and I will do my best to get you the information on a timely basis.