Texas Senate Bill SJR7

Texas 2017 - 85th 1st C.S.

Caption

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

Impact

The proposed change to the Texas Constitution could significantly impact property transactions. By preventing tax liens from being enforced on properties sold after the erroneous exemptions were corrected, it gives potential buyers greater assurance that they will not inherit unforeseen tax liabilities. This legislative move is intended to simplify the tax compliance landscape for property sales and enhance clarity for both sellers and buyers in real estate transactions.

Summary

SJR7, proposed by Hinojosa, seeks to amend the Texas Constitution regarding the enforcement of tax liens on properties that have been sold. Specifically, it addresses situations where properties or their values were erroneously exempted in previous years. The amendment aims to clarify that if a property, which had an erroneous exemption and is subsequently added to the appraisal roll, is sold in an arm's length transaction, the tax liens for that year cannot be enforced against the new owner. This provision would protect buyers from bearing the tax burden resulting from past errors related to exemptions.

Contention

There may be noteworthy discussions surrounding the bill, particularly concerning the implications of protecting new property owners from past tax liabilities. Supporters of the bill likely argue that it promotes fairness and encourages property sales by eliminating punitive measures related to previous errors. However, critics may raise concerns regarding the loss of revenue for local governments if properties are exempt from these tax obligations. Thus, while aiming to protect buyers, the bill's financial implications for public funding could become a point of debate among legislators and stakeholders.