SB 762 relating to the transfer of an ad valorem tax lien passed during the 82nd Legislature regular session. The act was signed by the Governor July 17th, 2011 and took effect September 1, 2011. The bill clarifies and cleans up some of the ambiguity contained in HB 2138, which provided for the creation and regulation of property tax lenders and passed during the 80th Legislature session.
We found an interesting article in The Wall Street Journal (clink this link to full article), dated August 20, 2011. A few of the salient points are summarized below. While we previously covered lowering property taxes specific to Texas property owners (click this link to see that blog), we found this article did a good job of laying out the opportunity for significant savings and the main areas where savings can be found. Here are two key takeaways:
According to the article, “Property taxes across the U.S. have increased by nearly 20% from 2005 to 2009…” and the article continues “Over the same period, home prices in major urban centers fared badly, decreasing 31%...”
This is a very significant discrepancy. Keep in mind this article is taking the entire U.S. into account and Texas counties such as Harris, Dallas, Collin, Denton, Travis, Bexar, Tarrant, Williamson, etc. are fairing much better in retaining their home value, but the values have still declined.
The cause is property taxes don’t move in lockstep with home values. Some county assessors don’t review every property every year and the value reductions may not be incorporated into your current appraisal. It’s likely your current property taxes reflect your home’s value when the housing market was healthier. Since, you can’t do anything about the tax rate as this is set for budgeting and is applied to the appraised value of all similar properties in the county; your appraisal value is your only opportunity to reduce your taxes.
When you are unable to make your mortgage payments on time you are legally in default of your mortgage contract. Default of your mortgage agreement can result in the lender exercising their right to foreclose on your property.
Section 33.41 of the Texas Tax code states that any time after its tax on property becomes delinquent, a taxing unit may file lawsuit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. The suit must be in a court of competent jurisdiction for the county in which the tax was imposed. Each owner who owns taxable property on January 1 is liable for all taxes due on the property for that year. This means that an owner who owned taxable property on January 1 can be sued personally for delinquent taxes on a property, even if the property has been sold or transferred since then.
According to the Texas Comptroller’s economic outlook, Texas has emerged from the recent recession. Leading indicators such as job growth and sales tax collections, both from business and consumer purchases, as well as automobile sales affirm the Texas economy is growing.
Believe it or not, the Texas constitution actually places various restrictions on the ability of the Legislature and local governments to impose taxes. Most of these restrictions concern local property taxes, with section 1-e prohibiting statewide property taxes.
The Texas franchise tax is a tax imposed on each taxable entity chartered/organized in Texas or doing business in Texas. The annual franchise tax report is due May 15, for entities that became subject to franchise tax in the previous year. Texas franchise tax applies to partnerships (except general partnerships directly and solely owned by natural persons), corporations, LLCs, business trusts, professional associations, business associations, joint ventures and other legal entities.
For those in the property tax lending business, this is our busy season. Tax delinquencies peak the first day they are past due, normally Feb 1st, then gradually reduce during the year as property owners pay or make arrangements to pay their taxes. It’s during the first six months of the calendar year that tax lenders incur the majority of their marketing expenses as we attempt to identify and market to property owners who need help with their past due property taxes.
I’m sure everyone is aware that the assessed value from the Dallas County Appraisal District (DCAD) will directly affect the amount property owners will pay in property taxes for 2011 (which will be due January 31, 2012).What you may not know is that as a Dallas County property owner you will only have a short window of time to try and lower the assessed value if you feel the amount being assessed is too high.Appraised value notices will be mailed out beginning May 1
