The New Texas Law Will Give Texans More Control Over Their Taxes
You hurriedly purchase and download the latest version of Quickbooks and get at it. After an hour of divulging your assets, income, and deductibles, you realize you paid the government almost 40% of your income. “Welp, there goes my trip to Saint Thomas”. With states like New York and California featuring the highest income tax rates in the country––13.3% and 8.82%, respectively––it makes you wonder if it’s time to pack up the family and move elsewhere. Enter Dallas, Texas.
Over the past seven years, the area has seen a 114% growth in home values, fueled by the state’s lack of any income tax and its affordable cost of living. A multitude of S+P 500 companies have moved their headquarters to take advantage of this benefit, making the city one of the hottest real estate markets and economies of the last decade.
Even better, the state of Texas is instituting a new property tax bill that will “slow [tax] growth” while also providing necessary transparency to voters. Known as the Texas Property Tax Reform and Transparency Act of 2019, many state lawmakers believe this new law will help fix a tax system that’s been broken for some time, which will, in turn, further increase Dallas’s prospects to those looking for a major metropolis with pro-voter tax laws.
Property Tax Bill Changes
The new law gives more power to voters. Some of this power includes:
- If a city, county, or school district wants to raise taxes, or increase revenue by 3.5% (this cap used to be 8%). Voters used to have to petition for an election to vote on this matter; the process now makes it automatic. This does not apply to cities with a population of less than 30,000.
- This change also makes it impossible for elected officials to hide tax elections during low-turnout elections held during the summer months. Now, these referendums must happen during the November general election. New transplants and locals can now rejoice knowing that their local lawmakers can’t pull a fast one on them any longer.
- The 153-page bill requires county officials to post to their website any current tax laws, data, or information for the public’s digestion, including public notice if there is a plan to raise the tax rate. This previous lack of transparency was something that infuriated state lawmakers and locals alike.
- Increased accountability of how the taxes will be used.
- No longer forced contributions from rich districts to the poor.
- The effective tax rate is a confusing term that essentially said “no tax increase”. That has now been changed to No-New-Revenue Tax rate.
- Government notification of homestead exemption.
- Protesters must now provide records of protests against taxes.
- A decrease in school-related taxes supplanted by multi-billion dollar increase from the state.
- No more appraisers, or government officials, also serving on an appraisal board of directors.
- Increase in comptroller control and responsibility.
- Creation of property tax advisory board.
The new law makes working in Dallas real estate even more enticing. Not only is this city becoming a cultural and economic powerhouse, but now locals have more tax power and transparency than ever. This will further push development, leading to an appealing new home for future transplants.