Texas House Bill HB4135

Texas 2019 - 86th Regular

Caption

Relating to the effect of certain residential structures on a residence homestead exemption for ad valorem tax purposes.

Impact

This legislative change could have significant implications for homeowners who choose to rent a portion of their property or maintain secondary structures. Under HB4135, the homestead exemption is protected if the rental of the additional structure complies with local regulations encouraging such residential units and only one additional unit is used on the property. This provision aims to support zoning laws by promoting responsible property use while ensuring homeowners do not face penalties for renting out parts of their residence.

Summary

House Bill 4135 amends Section 11.13(k) of the Texas Tax Code, addressing the implications of certain residential structures on a residence homestead exemption for ad valorem tax purposes. The bill clarifies that a residence does not lose its homestead designation when part of the property, or a separate structure on the same land, is rented out or used for other non-residential purposes. However, the portion of the residential structure utilized for business or incompatible uses may lose its exemption eligibility, thus being left out when calculating the homestead exemption.

Contention

Notable points of contention arise around the interpretation of 'incompatible uses' and the potential for local governments to regulate these provisions. Opponents may argue that the criteria set forth for maintaining homestead status may limit local policies that allow for multi-family housing or economic development. There may also be concerns regarding the enforcement of compliance with local programs and the standards for what constitutes permitted additional dwelling units, potentially leading to disputes over property tax assessments.

Effective_date

The act applies to ad valorem tax years beginning on or after its effective date, January 1, 2020, which indicates a forward-looking approach to taxation law adjustments.