Texas House Bill HB4206

Texas 2021 - 87th Regular

Caption

Relating to a study of the desirability, feasibility, and effects of limiting the appraised value of real property for ad valorem tax purposes to the value when the owner acquired the property and determining that value on the basis of the purchase price of the property, if applicable.

Impact

The proposed bill could significantly alter how real property is appraised for tax purposes, potentially leading to a decrease in property tax burdens for long-term homeowners whose property values have increased over time. By focusing on the purchase price, the bill may change the landscape of property taxes across the state and address concerns surrounding the affordability for residents who find themselves taxed at rates reflective of current market values rather than those at which they bought their homes. However, this could also result in implications for local revenue collections that depend on property taxes.

Summary

House Bill 4206 establishes a framework for a study that will investigate the desirability, feasibility, and potential effects of limiting the appraised value of real property for ad valorem tax purposes to the value at which the owner acquired the property. This assessment is to help determine if basing appraisals on purchase price could provide a more equitable taxation system that considers the original value rather than fluctuating market values. The bill seeks to engage a specially appointed commission tasked with conducting this comprehensive study and reporting back their findings.

Contention

Noteworthy points of contention could arise regarding the fairness of such changes to the appraisal system. Critics might argue that fixing appraisals at the purchase price could undermine the intent behind ad valorem taxes, which is to tax properties based on their current market value. Concerns may also surface about how this shift could affect the overall tax distribution and burden among residents, particularly those who have recently purchased property at higher values. The study commissioned as part of HB4206 ought to address these concerns, exploring the legal, administrative, and constitutional modifications necessary for such a change to be feasibly implemented.