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Texas Legislature Gaveled Out.A Number Of Real Estate-Related Bills Sit On The Governor's Desk
2019-5-28 12:43:57, Tierra Smith

Property tax reform, school finance reform and to-go beer sales are among the bills atop the desk of Texas Gov. Greg Abbot waiting to be signed into law. Abbot has until June 16 to veto legislation passed by the House and Senate.  

Texas lawmakers had a busy session, which ended Monday, negotiating and killing bills tied to the commercial real estate industry. Here is what made it through:

The long-sought property tax reform made it out this session. 

The legislation seeks to slow down the rapid rise of property taxes. Introduced as Senate Bill 2, the bill requires local governments to hold a mandatory election if property tax values rise above 3.5% year over year; previously the rollback tax rate was 8%. 

Sen. Paul Bettencourt (R-Houston), who has been advocating for property tax reform since he was elected in 2015, said this is a once-in-a-generation change. The state has taken nearly 40 years to adjust the rollback tax rate. 

"This is good news for the commercial real estate industry as substantial tax relief is coming their way," Bettencourt told Bisnow. "The property tax rate increases are going to finally start slowing down. We are not just tapping on the brakes but jamming them." 

Houston Building Owners and Managers Association, an industry organization that has pushed for property tax reform since 2014, also expressed gratitude to see this bill to the finish line.   

"We believe the passage of SB2 is a victory for all Texans," Houston BOMA CEO and Executive Vice President Tammy Betancourt said in an email. "Uncertain taxing environments act as a disruptor for new businesses looking to call Texas home. SB2 goes a long way to create a more transparent, efficient and effective property tax system across the state which will benefit every taxpayer and will serve to create a predictable tax environment for Texas businesses."    

Commercial property values across all property types in Houston have risen by nearly 40% over a five-year period ending in 2017, according to Houston BOMA. Property values increased from $24.4B in 2013 to $33.8B in 2017.  

While many real estate experts note the benefit for property owners, many local tax agencies are against the action. They say the bill will cut local municipalities' budget by millions of dollars and limit their ability to provide adequate funding for public safety, schools and roads.  


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