In Texas, where there’s no state income tax or a state-levied property tax, it’s the tax bills from your county, your municipality, your school district, and various other special districts that’ll get you. All these entities are largely dependent on property taxes to fund their budgets and have benefitted for decades from an outdated and murky tax structure and the steady rise in property values across the state. At the same time, property owners have seen higher and higher tax bills, and more than a few have been forced to sell as a result. Texas REALTORS® have been battling the ‘Hidden Property Tax’ inherent in the system for years, and on June 12, 2019, with a boost from a sweeping Issues Mobilization campaign, the Texas Property Tax Reform and Transparency Act was signed into law.
“We are so grateful to the REALTOR® Party for its support of our Hidden Property Tax campaign, which helped shift the statewide discussion on the need for property tax reform,” says Tray Bates, 2019 Chairman of the Board of Texas REALTORS®. “The campaign also provided legislators with the support they needed to feel confident their actions were in the best interests of, and desired by, their constituents.”
“This is huge,” adds Daniel Gonzalez, the association’s Chief Lobbyist and Director of Legislative Affairs. The ‘Hidden Property Tax,’ he explains, results from the misleading claim by local taxing entities that they have not raised ‘taxes,’ when, in fact, they mean ‘the tax rate.’ The rise in appraisal value ensures that their tax revenue increases, along with the tax burden on property owners, despite a level tax rate. If property owners see contesting higher appraisal values as their only recourse, they will inadvertently devalue their investment – and local market values. The new law addresses these issues with two important reforms: first, the creation of online databases providing taxpayers with a transparent understanding of the process that determines their annual property tax bills; and second, a lowered threshold for increasing public revenue via property tax collection and a mechanism requiring voter approval for increases beyond the established thresholds.
The Hidden Property Tax campaign was fully comprehensive, reaching REALTOR® members, consumers, and legislators with a website, social media, direct mail, earned media, and online advertising. As consumer confusion over the property tax structure was a significant part of the problem, Texas REALTORS® made a concerted effort to educate the media about the issues, with enhanced media relations, including a special three-part media-training series last year. “Journalists really are interested in seeking out sources and getting their facts straight,” notes Gonzalez, “and while the challenge is that journalists tend to be transferred to different beats and different markets, we’ll just keep helping them to understand the real estate issues. In the end, we’re building a valuable network of professionals whose business is presenting information to the public.”
Housing affordability is a problem all over the country, Gonzalez adds, noting that another beneficial side-effect of this campaign has been demonstrating to the public that the REALTORS® are not in it for themselves and their industry, but for their clients and property-owners throughout the state. “Making sure homeowners have the information they need about their property taxes is going to result in healthier, stronger communities, and that’s good for everyone. History will show that this legislation will have a tremendous impact on homeownership in Texas.”
To learn more about how Texas REALTORS® have succeeded in reforming the taxation process and protecting property owners in the great state of Texas, contact Daniel Gonzalez, Chief Lobbyist and Director of Legislative Affairs, at 512-370-2143.