InstantNewsKaty.com

Noting that Katy area homeowners are no strangers to the problems of “appraisal creep” and growing property tax burdens, State Rep. Bill Callegari (R-Katy) has endorsed Proposition 2 as a way to end what he has branded unfair taxation practices.

Proposition 2 will be among a host of constitutional amendments on the Nov. 3 ballot.

CALLEGARI

Callegari said Katy residents have long clamored for lower appraisal caps and broader property tax relief. Prop 2 takes a step in that direction, and presents an opportunity to establish reforms to the property tax appraisal process that will ensure homes are fairly and reasonably valued, he said.

Proposition 2 reads: “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.” 

While some tax opponents have interpreted this language as authorizing a statewide property tax or increase in property taxes, Callegari said that was not the case. If approved by Texas voters, Proposition 2 would protect certain homeowners from an appraisal process that could force many from their homes.

Currently, homes are appraised on the basis of their “highest and best use.”  Appraisal districts using this standard may appraise a home at a value based on its commercial potential rather than its actual use as a home. 

For example, a home located near a shopping center may be appraised as a retail shop.  Residences near condominium complexes may be appraised as commercial property.

Use of the “highest and best use” standard has been blamed for extensive increases in property valuations by the Fort Bend Central Appraisal District in the Fulshear area.

This widely-accepted practice can lead to substantial, and sometimes seemingly arbitrary, increases in a home’s taxable value.  In one documented case, a home was appraised at $150,000 in 2007 and at $360,000 one year later, Callegari pointed out. 

“This unbelievable appraisal increase was the direct result of commercial development in the area.  The local appraisal board justified this increase by applying the ‘highest and best use’ standard,” he said.

While the current ten percent appraisal cap on residential homesteads helps protect some homeowners from radical increases in their property taxes, many end up with significantly higher tax bills in the long run.

“Unfortunately, under current law, even though a homeowner lives in their residence, they’re on the hook to pay taxes for the highest and best uses of their property even though they never intend to use their property for commercial purposes,” Callegari said. “At some point, some homeowners may face an unfortunate choice – either stay in their homes and pay significantly more in taxes or move elsewhere.  I find these options unacceptable.”

Proposition 2 would fix the problem of “highest and best use” appraisals for Texas homeowners, Callegari explained.

“The proposition would require that the market value of a residence homestead be determined by its value as a residence homestead.  In other words, your home would be appraised as a home, and not as something else,” he said. “Homeowners would no longer be taxed using the assumption that their property could be used for something more valuable than what it already is.  While change may not help every homeowner, particularly those living in some subdivisions, it will certainly assist those living near commercial or developing areas.”

Voter approval of Proposition 2 would not, however, end the need for further property tax reform, Callegari stressed.

“I firmly believe that the residential appraisal cap needs to be lowered from ten percent to five.  Further, a firm limit needs to be set for commercial property appraisals,” Callegari explained. “I have worked in past legislative sessions to pass these measures, and will continue the fight.  The passage of Proposition 2 will help this endeavor by sending a clear message that property tax appraisal reforms are needed.”

Proposition 2 would be a fair, common-sense answer to a property tax appraisal problem that has plagued homeowners for years, he added.

“The proposition does not aim to increase property taxes or establish a statewide property tax,” Callegari said. ”To the contrary, Proposition 2, if approved by Texas voters on Nov. 3, will help end a practice that has taxed too many Texans out of their homes.”

Callegari’s district includes most of the Katy area.