Heirs may feel effect of property tax cut in Texas

If you are an heir or beneficiary of a property owner in Texas, you may not be happy about the possible news of tax relief in the upcoming year.

Political pundits and lawmakers have been tossing around the idea for a while now, having been exacerbated by primary elections and runoffs. One candidate for governor promised to cut Texas property taxes and emphasized the cuts would be particularly beneficial for older voters. The litany has continued on his social media site.

The liberals and independents in the Lone Star State might be happy to hear the potential cuts. While the state property taxes are levied by the local governments, lawmakers have little power to change the rates doled out to unhappy homeowners. The news is not all bad, however, given that the state can prevail over allowing provisions for citizens over 65 as well as for farms.

While the law says some older homeowners are eligible for a freeze in taxes, they can also reduce or eliminate them in favor of liens payable after their deaths. This is not appealing for heirs and beneficiaries but helps older voters to continue to survive financially and keep their homes.

Implicit in state control is the financial repercussions trickling down to school districts and city municipalities that would have to scramble to get funding in other areas. If legal provisions allow for freezing appraisals and tax bills, exemptions could be extended to younger homeowners, who might find the new guidelines unfair and prejudiced according to age.

In Texas, as in other states, it is all about revenue. To keep funds flowing, local governments would have to penalize those not eligible for exemptions. Beneficiaries and heirs to property owners will be affected by this situation. To protect yourself and your financial future, you should contact a legal professional who can assist you in understanding your rights as a beneficiary or heir, and what tax implications might be upon the death of a loved one who has designated you in his or her will.

Source: ;The Texas Tribune, “Analysis: Finding Property Tax Cuts That Taxpayers Feel“, June 27, 2014