Property appraisal is a thorny issue at

best and promises to be the subject of

much debate for a very long time. Any

reform will directly affect your

business–the only question is how.

Recently we were able to get three

appraisal reform propositions onto the

state ballot and passed in a statewide

constitutional election.

Propositions 2, 3, and 5 improve the

property appraisal process, giving

homeowners a fairer shake with our

annual property evaluations for tax

purposes.

Not every association manages to get constitutional amendments on the ballot, much less passed. We’ve had six in the last three years, including Proposition 6 from two years ago, exempting Texas REALTORS® from an unfair mixed-use vehicle tax.

We’ve made progress but we have a long way to go toward making Texas a better place for private-property owners.

In Texas, we have a stable real estate

market. We’re not prone to wild

fluctuations like the left and right coasts of

the country. And our foreclosure ranking is

way down the list compared to other states.

One reason is our consumer-friendly home

equity lending law, which Texas

REALTORS® championed and passed back

in 1997. It has strong consumer protections,

like an 80% loan-to-value limit–none of

that crazy borrowing 125% of the home’s

value that you see on national TV.

Every time the legislature meets in Texas,

lobbyists for large national lenders try to

convince our lawmakers to amend our

home equity law. These efforts, if

successful, would dilute the hard-fought

consumer protections currently in place,

result in more foreclosures, and lower

property values.

Every time our state is faced with a deficit,

some Texas lawmakers look to the real

estate industry to make up the difference.

This last session, more than 11 attempts

were made to pass a real estate transfer tax.

These transfer taxes raise the cost of

purchasing homes, pricing some buyers out

of the market.

The ugly truth about transfer taxes is that

they are proposed every year. That’s

because they are seen as an easy solution to

boost government revenue.

But transfer taxes raise the cost of

purchasing homes. Some buyers are priced

out of the market, meaning no commission

at all. Others pressure you to cover some of

their high costs by lowering your

commission.

Another one that some legislators consider

when there is a deficit is a tax on services.

The last time was in 2003. It would extend

the state sales tax to all services listed on

HUD-1, including your commissions.

And now, it’s looking like we’ll be faced

with a deficit again during the next

legislative session.

During the 80th Texas Legislature, we

prevailed in exempting your personal auto

from ad-valorem taxation. And with

overwhelming passage of Proposition 6 in

the November 2007 constitutional election,

you’ll never have to worry about this unfair

tax again.

Mixed-use vehicle tax Some county tax assessor-collectors were targeting Texas

REALTORS® for an ad-valorem (property) tax on personal

vehicles. If left unchecked, this new tax could’ve spread

statewide to all Texas REALTORS® and other independent

contractors.

Vehicle value $

X 0.0275 = $

Professional feesWe opposed a legislative proposal to double the $400

fee that real estate brokers pay for their two-year license

in Texas.

Your savings: $400.00

Tax on services We defeated another proposal to extend the state sales tax

to professional services. Had it passed, your commissions

would’ve been taxed at 8.25%.

Gross commission value $

X 0.0825 = $

Transfer taxA tax on the transfer of real property would discourage

homeownership in Texas. According to a leading

economist, that translates into a 7% reduction in sales

volume. That’s why we’ve fought hard to stop repeated

attempts to pass this insidious tax.

Sales volume value $

X 0.07 X Take-home percentage

= $

Example: $2,000,000 (sales volume value) X 0.07 = $140,000 (sales volume reduction)

$140,000 (reduction in sales) X (your take-home percentage) = $ (your savings)

Now add it all up

Mixed-use vehicle tax $

Professional fees $ 400.00

Tax on services $

Transfer tax $

Your total savings: $