Prop 2 & 3 - direct taxation of homestead?

[High_Plains_Retired]

Originally Posted by lakehighlands

I posted this in the Dallas forum and will post it here as well;

Proposition 2-
The value of any property anywhere in the state of Texas should be based on its Highest and Best Use. Highest and Best Use is the most probable use of the land or improved property that is physically possible, legally possible, financially feasible, and the use that provides maximum profitability. Limiting the amount a residential homestead can be valued at effectively eliminates the appraisal district's responsibility to put an "accurate" value on the property for ad valorem tax purposes.

An example: A residential property sits on a very busy, commercialized street. Surrounding commercial properties have sold in excess of $15 per square foot. If the residential property were to be placed on the market, it would sell for land value of $15 per square foot, but because of Proposition 2, it has to be valued as a residential homestead. Why should the owner of this residential property be assessed at a lower property value than any of the other properties?

Proposition 3-

The legislature has no business enforcing appraisal standards, that should be left to the counties. We do not pay "state taxes" on our properties, so why should the state legislature be involved in the decision making processes for ad valorem tax purposes. Additionally, most of the larger appraisal districts have no issue abiding by and following USPAP standards.

Your definition of Prop #2 sounds exactly the opposite of that given in the OP's definitions. e.g.:
Proposition 2
(HJR 36 - #1)

HJR 36 would amend the constitution to authorize the legislature to provide for the taxation of a residence homestead solely on the basis of the property's value as a residence homestead, regardless of whether the property may have a higher value if it were used for other purposes.

The proposed amendment would appear on the ballot as follows: "The constitutional amendment authorizing the legislature to provide for the ad valorem taxation of a residence homestead solely on the basis of the property’s value as a residence homestead."

I would vote no if your definition is true.

[iceshots]

Originally Posted by lakehighlands

I posted this in the Dallas forum and will post it here as well;

Proposition 2-
The value of any property anywhere in the state of Texas should be based on its Highest and Best Use. Highest and Best Use is the most probable use of the land or improved property that is physically possible, legally possible, financially feasible, and the use that provides maximum profitability. Limiting the amount a residential homestead can be valued at effectively eliminates the appraisal district's responsibility to put an "accurate" value on the property for ad valorem tax purposes.

An example: A residential property sits on a very busy, commercialized street. Surrounding commercial properties have sold in excess of $15 per square foot. If the residential property were to be placed on the market, it would sell for land value of $15 per square foot, but because of Proposition 2, it has to be valued as a residential homestead. Why should the owner of this residential property be assessed at a lower property value than any of the other properties?

Is the paragraph following the words Proposition 2, your opinion of how the world should be, or your explanation of what Prop 2 is?

If it is the latter, then I read it differently in that prop 2 will tax a residence at a residential rate as long as it is used as a homestead. Does not matter what other potential uses it has.

In your example you state " Why should the owner of this residential property be assessed at a lower property value than any of the other properties?" I have one good answer to that. The other properties are generating income for the owner and therefore should be taxed accordingly. The property being used as a homestead is probably not generating any income. In fact, in the situation you described, it is probably someone who has lived in that same house while the rest of the neighborhood went commercial. Forcing that resident to pay commercial level taxes would probably drive them out of their home.

To me, prop 2 sound like a good deal for the homeowner. But I'm pretty sure there will be business owners who will find ways to classify a business property as a homestead.

[celestecreager]

Correct me if I am wrong, but it sounds like the state now wants to tax homestead properties in these propositions. Is this what would happen if they get passed????