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3 Bills Attempt to Change Property Seizure Tax Law in Texas

Every state's taxation policies are different. Some have higher income taxes while other states have no income taxes. Some put a sales tax on everything but food and clothing, while others put a sales tax on everything -- including rent payments.

In Texas, we do not have an income tax, but we have higher than average property taxes. In our recent downturned economy, some families have had a hard time paying their property taxes. If the uncollected taxes remain unpaid for long enough, the state or county may seize the property.

There are three bills under consideration in Texas that would change the tax law related to property seizure. The three bills would be up for consideration when the legislature convenes next year.

A recent newspaper article outlines the reasons for the three bills. At first glance it appears that the bills are primarily designed to collect the taxes, and may not be as concerned about homeowners losing their property or about differentiating between struggling homeowners and fraudulent scofflaws.

  • One bill would change the delinquency period from five years down to three years. The reasoning is that if a property has five years of back taxes owed, it has likely deteriorated. Three years would yield a property in better condition after seizure. This bill assumes that the property has been abandoned, although one could imagine that some are occupied.
  • A second bill would require that any new owner who buys the seized property be required to pay the back taxes. The net effect of this would probably be to increase the cash a new buyer would have to put into the property.
  • A third bill would enable the taxing authority to go back 10 years if it discovers a mistake such as an under-appraised property or one that fell through the cracks and was not listed.

For those property owners who are behind on their property taxes, it might be a good idea to consult with a tax or legal professional to discuss all available options.

Source: The Brownsville Herald, "Show respect: Updates of forfeiture laws must have fairness as goal," June 24, 2012

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