The end of sales price non-disclosure might be near, if the suit filed by the City of Austin against the Texas comptroller’s office is any indication. Austin Mayor Steve Adler, who submitted the 10-page suit on Monday, argued that the ad-valorem taxation system is unconstitutional because it isn’t “equal and uniform.”
Texas is one of the few states that, instead of relying for sales figures for tax purposes, employs an appraisal system. However, with skyrocketing values for residential properties in Travis County, commercial valuations haven’t grown nearly so much. It’s becoming a big problem, the suit suggests.
“The lack of sales disclosures has made it nearly impossible for appraisal districts to comply with their statutory and constitutional duty to assess all properties at market value so that taxation is equal and uniform,” the lawsuit states.
Texans have some of the highest property tax rates in the nation. Ad-valorem taxes make up about half of the state and local tax revenue, and are the sole source of funding for school districts. This has caused budget woes for schools, a problem that Texas has had for years (and likely for years to come).
Dick Lavine, chairman of the Travis appraisal district’s board of directors and a supporter of the lawsuit, compared the Austin suit to the school finance lawsuit headed to the Texas Supreme Court next month. Both seek court orders forcing the Legislature to tackle what critics view as inequities in the system.
“It’s really an attempt to have certain sections of the tax code declared unconstitutional,” said Lavine, who is also a senior fiscal analyst for the Center for Public Policy Priorities.
The staunchest critic of mandatory sales price disclosure is the Texas Association of Realtors, claiming that sales prices and property appraisals are two distinctly different values. When purchasing a property, certain “intangibles” come into play, said TAR Legislative Affairs Director Daniel Gonzalez in the Texas Tribune.
Tell us: What do you think about mandatory disclosure? Will it hurt the market? What about luxury transactions?