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Tax Season | 3 min read

2022 Property Tax Law Changes from the Texas 87th Legislative Session

Each new year brings all the hope of what a new year is supposed to bring, but these past couple of years have us questioning whether a new year means anything new at all. Will we still be dealing with the same old same old story?

This year began with the continued challenges of public health policies and uncertain times affecting the economy and business decisions. We’ve seen some relief, but is it enough? Property tax relief has been top of mind for home and commercial property owners in Texas for quite some time.

Politicians have promised to cut property taxes, but many believe they have failed to deliver. Lasting reform and a fix to the property tax issues were the assured results of the 86th legislative session, but complaints continue as Texans have been presented with a 2021 property tax bill of $73.2 billion, which is $9.4 billion more than 2019. With all that in mind, let’s look at what the historic 87th Texas Legislative Session brought us after passing over 600 new laws.

Property Tax Changes from the Texas 87th Legislative Session

The following are some of the property tax law changes from the Texas 87th Legislative Session.

  • Senate Bill 1 increases the existing mandatory homestead exemption on school district property taxes from $25,000 to $40,000.
  • Senate Bill 1449 increases the taxable value below which tangible personal property used for the production of income is exempt from $500 to $2,500.
  • House Bill 1197 extends the current property tax exemption for a tract of contiguous land owned for religious worship expansion purposes from 6 to 10 years.
  • Senate Bill 8 allows an individual who acquires property after January 1 of a tax year to receive a residence homestead property tax exemption on the property for the applicable portion of the tax year in which the individual qualified.
  • House Bill 2535 directs the property value appraiser to exclude chicken coops and rabbit pens meant for personal consumption from the value of a property.
  • Senate Bills 1088 and 1421 clarify that lessees of real property that are contractually obligated to reimburse the property owner for taxes are entitled to receive the notice of appraised value.

Reviewing the changes cited above probably makes it appear that the legislative session won’t make a huge impact on commercial property taxes in Texas heading into 2022, but several bills that were filed for an extension this past session expired, including the programs associated with them.

Texas Tax Code Chapter 313, or The Texas Economic Development Act

Texas Tax Code Chapter 313, otherwise known as The Texas Economic Development Act, created a state tax incentive program for some large businesses to limit the appraised value on their property for local Texas public school district property taxes.

Created in 2001, this program was originally set to expire in 2007. It’s been renewed several times with the most recent expiration date of December 31, 2022. Agreements like these help the state attract new businesses because many say that our high property taxes place Texas at a disadvantage when competing for businesses making new investments.

This agreement has also been credited as being largely responsible for the “Texas Miracle,” and many businesses wouldn’t have come to Texas without it. During the 87th Legislative Session, HB 1556, which was filed to extend this program’s expiration date from December 31, 2022, to December 31, 2032, and allowed tax benefits for project renovations died in the Texas House.

Only time will tell what future relief will look like, therefore it’s important now more than ever to review your property portfolio with an expert.

SWBC Ad Valorem Tax Advisors has a 30-year proven track record of reducing business and commercial property owners’ annual property taxes. Visit our website to find out if we can help your business reduce its property taxes.

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Adam Wetherell

Adam Wetherell helps commercial real estate and personal property owners reduce their property taxes. He handles business development for the Ad Valorem Tax Advisors division of SWBC. As a San Antonio native and graduate of the University of Texas at San Antonio, Adam joined SWBC after spending many years in residential and commercial interior finish out as well as technology all throughout Texas.

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