Welcome to Medearis Law Firm, PLLC! We are here to help you navigate the intricate world of real property taxes in the great state of Texas. Our experienced team specializes in probate and real estate matters, including halting foreclosures and assisting clients through property transfers and sales. In this article, we will break down the key aspects of real property taxation in Texas, providing you with the knowledge you need to make informed decisions and protect your interests.
The power to tax in Texas is derived from the inherent sovereignty of the state, rather than from federal or state constitutions. The burden of levying taxes rests with the state legislature, which holds plenary power to determine the necessary methods for raising revenue. On the other hand, the taxing power of local subdivisions, such as counties, cities, and school districts, is derived from the Texas Constitution, state statutes, and city charters.
Real property taxation in Texas is based on the jurisdiction of the state, which extends to all real property within its borders. The obligation to pay property taxes is inherent to ownership, irrespective of the recorded owner in the taxing unit’s records. The Texas Supreme Court emphasizes that ownership gives rise to tax liability, and the appraisal and tax rolls merely reflect this ownership without creating it.
When it comes to real property taxation, the definition encompasses various elements. Real property includes land, improvements, mines, quarries, minerals in place, standing timber, or any estate or interest (excluding security interests) in these entities. This broad definition makes it clear that intangible interests and rights related to real property can be separately taxed from the physical property itself.
In cases where real property can fit into multiple taxable categories, the taxing authority has the responsibility to categorize it for taxation purposes. Each property is appraised based on its individual characteristics that influence its value. For instance, limestone, which is not classified as a “mineral,” cannot be taxed separately from the quarry where it is located. A taxing authority may tax only those portions of a limestone deposit that are actively used as a quarry. Surface estates covering nonproducing limestone may be taxed based on the per-acre value, rather than the market price per ton.
The Tax Code defines improvements as buildings, structures, fixtures, or fences erected on or affixed to land. It also encompasses transportable structures designed for residential or business purposes, whether or not they are affixed to land. However, if a structure is unoccupied and held for sale or is temporarily located at a particular place, it may not be considered an improvement for tax purposes.
On January 1 of each year, a tax lien is attached to a property to secure the payment of all taxes, penalties, and interest imposed on that property for the year, regardless of whether the taxes have been imposed in that particular year. This means that the lien exists even if the taxes are not yet due or have not been assessed [Tex. Tax Code § 32.01; Dallas Central Appraisal Dist. v. Wang, 82 S.W.3d 697, 703 (Tex. App.—Dallas 2002, no pet.)]. Tax liens not only secure the payment of taxes but also any penalties that may be imposed by the taxing unit to cover the costs of tax collection [Tex. Tax Code §§ 33.07(b), 33.08(d)].
A tax lien generally takes priority over various claims and interests associated with the property [Tex. Tax Code § 32.05(b)]. This includes the claims of creditors of the property owner, any lien holders on the property (including property owners’ associations or condominium regimes), and any future interests or encumbrances against the property, whether vested or contingent [Tex. Tax Code § 32.05(b)]. It’s important to note that a claim asserting the superiority of a tax lien is not an affirmative defense; instead, the plaintiff must establish the validity of their own lien and the invalidity of the superior tax lien [Genesis Tax Loan Servs. v. Kothmann, 54 Tex. Sup. Ct. J. 988, 990, 339 S.W.3d 104 (Tex. 2011)].
Understanding tax liens and their impact on real property is crucial for property owners. At Medearis Law Firm, PLLC, we have the expertise and knowledge to guide you through the complexities of tax liens, ensuring that your interests are protected. Whether you are facing foreclosure or need assistance with property transfers and sales, we are here to help you navigate the legal landscape and make informed decisions. Contact us today to schedule a consultation and learn more about how we can assist you.
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Welcome to Medearis Law Firm, PLLC! We are here to help you navigate the intricate world of real property taxes in the great state of