How TAR fought for commercial real estate

The 85th Texas Legislature considered several bills related to commercial real estate.

  • During the regular session, TAR supported House Bill 1449 (Simmons), which was signed into law to prohibit cities from imposing linkage fees on all new residential and commercial construction effective May 29.
  • TAR opposed legislation in the regular session that would have allowed a central appraisal district to appraise specialized commercial property using a method that includes hypothetical use in the valuation. This change would have meant commercial property owners would be subject to property taxes based on their potential business options, rather than the value of the physical structure and land. Thanks to Texas REALTORS®’ efforts to educate lawmakers, this bill didn’t advance.
  • TAR opposed multiple bills this session that would have extended the 10% appraisal cap on homestead residences to commercial and industrial real property. These bills did not advance.


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6 Responses to How TAR fought for commercial real estate

  1. Iredell D Polk says:

    So why not have a cap of 10% on valuation of Commercial and Industrial property? Since 2005 I have been involved with Arbitrations as a Realtor and in many cases the CAD’s have adjusted up from 10%.


    • DPalermo says:

      I couldn’t agree more. Not sure I understand the motivation to oppose having the cap apply to commercial properties. I am a TAR member and my book of business is nearly exclusively commercial. Seems TAR’s position is counter that of my clients. Thank you TAR, in advance, for enlightening us as to the organization’s motivation in opposing this legislation.


  2. Dwayne Clark says:

    How about districts have to have at least 3 property sales in a year before justifying a whole huge area to go up in value? How about not allowing them to go into the next year to justify an appraised value? In other words, when they can’t justify jacking up the appraisal on the year they are supposed to, they will go into the next year. Collin County did this to me. How about any sales have to be within a mile of the property or else it can’t be used? How about NO values go up until a property actually sells? In other words again, the appraised value stays the same forever until the property sells, then it is adjusted up to the sales value?


  3. Cathy says:

    I agree with others…would love explanation why cap on commercial property valuations is a bad thing, please.


  4. Thanks to everyone for their comments. The Texas Association of REALTORS® opposed these bills because it’s TAR’s position that artificially limiting the appraisal value of property—under the guise of limiting property tax bills—sets a dangerous precedent of government overreach. We believe legislators should instead focus their attention on the tax-rate-setting process at the local level.

    It’s important to remember that property tax bills are composed of two factors: the property’s appraised value and the tax rates set by each of the taxing entities where the property is located. If a taxing entity cannot raise additional revenue by increasing property values, it will simply do so by raising tax rates. As a result, appraisal caps actually guarantee an automatic annual increase in property tax bills, meaning property owners will not realize any tax relief as a result of an appraisal cap.

    Also, appraisal increases on residential homestead properties are already capped at 10%,and we have not seen any demonstrated property tax relief for homeowners as a result because taxing entities simply adjust their tax rates to compensate.


  5. CEG says:

    Taxing authorities usually do both. The 10% cap on commercial does not necessarily guarantee that it will automatically be 10%. You always have the option to protest. The cap would guard against unwarranted increases of 20-30% increases when the rental structure is fixed for an additional time frame.


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