Texas Senate Bill SB443

Texas 2009 - 81st Regular

Caption

Relating to the appraisal of inventory consisting of residential real property.

Impact

The implementation of SB443 is expected to impact the taxation landscape for residential real estate businesses in Texas. By including unoccupied residential properties in the inventory for appraisal purposes, the bill allows these properties to be assessed for ad valorem taxes based on their market value when sold as part of a business. This change is particularly important for developers and real estate investors holding properties for sale but not generating rental income, potentially lowering the tax burden associated with such properties in the interim.

Summary

SB443 amends the Tax Code of Texas to modify the appraisal process for inventory specifically consisting of residential real property. The bill aims to clarify that the market value of such inventory should be calculated based on the selling price, assuming a purchaser would continue the business. This ensures that residential properties that have never been occupied and are held for sale are treated distinctly under tax regulations. By defining how unoccupied residential real property is appraised, SB443 seeks to eliminate ambiguities that may have previously led to inconsistent valuations.

Contention

While the bill primarily focuses on appraisal processes, there may be points of contention regarding its impact on local government revenue from property taxes. Since the bill concerns properties held for sale that are unoccupied, stakeholders such as local governments may voice concerns about potential reductions in expected tax revenues. Additionally, the clarification may prompt discussions on fairness in tax assessments, particularly for properties that have been held for lengthy periods without occupancy.