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TAR Fights for Commercial Real Estate

Thursday, June 14, 2018  

TAR fights for commercial real estate

- For those of you who wonder what TAR does for you, it fights for commercial real estate!

- During the 85th Texas Legislature and the special session that followed, many bills were considered that would have protected commercial real estate

... and several bills were filed that would have harmed the industry.

Prohibit fees on new construction

- During the regular session, TAR supported House Bill 1449 (Simmons), which prohibits cities from imposing linkage fees on all new residential and commercial construction.

- These fees raise costs to real estate consumers and harm economic growth and expansion in Texas. Gov. Abbott signed the bill restricting these linkage fees on May 29, and the law became effective immediately.

Commercial Property Valuation Standards

- TAR opposed legislation during regular session that would have changed appraisal standards to allow a central appraisal district (CAD) to appraise specialized commercial property (such as large-format retail buildings) using a method that includes hypothetical use in the valuation.

- This change in valuation standards would have made commercial property owners subject to property taxes based on their potential business operations ("value of use"), rather than the value of the physical structure and land.

- Thanks to Texas REALTORS®’ efforts to educate lawmakers, this bill never became law.

No appraisal caps on commercial

- TAR also opposed multiple bills this session that would have extended the 10% appraisal cap on homestead residences to commercial and industrial real property.

- TAR has historically opposed attempts to artificially limit a property’s market value, as value increases are signs of a robust local and state economy and lead to greater building of wealth.

- The Legislature agreed with TAR’s position and these bills did not become law.

Tax reform

- While personal property exchanges are no longer part of section 1031, NAR was successful in maintaining protections for real property assets. Real property 1031 exchanges stimulate the US economy and benefit taxpayers at all levels.



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