Texas House Bill HB120

Texas 2017 - 85th 1st C.S.

Caption

Relating to the effect of a sale of property on the tax lien on the property to secure the payment of taxes, penalties, and interest imposed on the property as a result of the addition to the appraisal roll of property or appraised value that was erroneously exempted in a prior year.

Impact

The enactment of HB 120 could have significant implications for property owners and local government tax revenues. By preventing liens from being enforced in specified circumstances, the bill seeks to protect property buyers from inheriting unexpected tax burdens associated with prior assessments. This could enhance the attractiveness of real estate transactions in Texas, as potential buyers may feel more secure knowing they will not face unforeseen tax liabilities from previous owners' mistakes.

Summary

House Bill 120 aims to address the implications of property sales on tax liens, particularly in cases where properties have been added to the appraisal roll after being erroneously exempted in prior years. The bill specifies that if a property is sold in an arm's length transaction to an unrelated buyer after January 1 of the tax year, a tax lien cannot be enforced for taxes, penalties, or interest that accrue from the addition of the previously exempted value. This legislative change is intended to provide relief to taxpayers who might otherwise be burdened by additional tax liabilities due to administrative errors in property assessments.

Contention

While the bill aims to simplify the tax process for property sales, there may be concerns from local governments regarding its potential impact on tax revenues. Officials may argue that it could limit their ability to recover taxes tied to properties that were inaccurately exempted, which might disrupt local budgets. The balance between taxpayer protection and funding for local services will be a critical point of discussion as the bill progresses through the legislative process.