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.
If adopted, SJR31 could significantly impact property sales and transactions by providing legal clarity surrounding tax liabilities associated with erroneously exempted properties. This could enhance market confidence and stability by ensuring that buyers are not unduly penalized for past taxation errors that do not pertain to their ownership. By preventing liens from impacting sales under these circumstances, the bill aims to encourage a fairer transaction process and protect new owners from unexpected tax obligations that may arise post-sale.
SJR31 proposes an amendment to the Texas Constitution concerning the effect of property sales on tax liens. Specifically, it addresses cases where property or property value was erroneously exempted in previous years and subsequently added to the appraisal roll. The bill seeks to clarify that in instances where such properties are sold in an arm's-length transaction to unrelated buyers, a tax lien will not be enforced for taxes, penalties, or interest imposed due to the previous exemptions. This intends to relieve potential buyers from inheriting such tax liabilities upon purchasing properties that could have historically been regarded as exempt owing to prior assessments.
Notable points of contention surrounding SJR31 center on the implications it has for tax authority and local government revenues. Critics may argue that exempting properties from liens could reduce the funds available for local services, as these taxes often contribute to essential public services. Additionally, there could be concerns regarding potential abuse of the exemption mechanism, where sellers might take advantage of the amendment to evade tax responsibilities. Ensuring a balance between protecting property buyers and securing sufficient tax revenues for community needs will likely be a focal point of discussion.
The bill is anticipated to be presented to voters on November 5, 2019, during an election, allowing the public to weigh in on the proposed constitutional change regarding property tax liens.