Texas House Bill HB2395

Texas 2019 - 86th Regular

Caption

Relating to the treatment of a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by wind or water damage as a new improvement for ad valorem tax purposes.

Impact

The implications of HB2395 extend primarily to property owners who have experienced destruction or significant damage to their homes. By allowing replacement structures to be classified differently for tax purposes, it seeks to lessen the financial burden on these homeowners during tax assessments in the year following the damage. Specifically, as long as the new structure does not exceed the square footage or quality of materials of the original structure, the appraised tax value will reflect that of the prior year, preventing sudden spikes in tax burdens on those already facing recovery challenges.

Summary

House Bill 2395 addresses the treatment of replacement structures that were built due to the damage of existing structures by casualties such as wind or water damage. The bill amends the Tax Code, specifically sections relevant to ad valorem taxes, stating that a new structure replacing one deemed uninhabitable or unusable due to such damage will not automatically be considered as a new improvement for tax assessment purposes. This change is significant as it seeks to provide tax relief for homeowners who have lost their property due to unfortunate events.

Contention

There are likely points of contention surrounding HB2395 regarding its definition of 'replacement structure' and what qualifies as significant improvement. Critics may argue that this bill could potentially incentivize substandard replacements, as property owners might seek to rebuild with minimal changes to avoid higher taxes. Moreover, discussions in legislative sessions could highlight concerns about the balance between providing necessary tax relief and ensuring the maintenance of property standards within the community. Ensuring that the intent of providing fair treatment does not inadvertently lead to loopholes in property improvement standards is critical.