Texas is one of only five states that doesn’t require that sales prices of real estate be reported to the state.
The government knows what you earn. It knows what you paid for your car and your clothes. But in Texas it doesn’t know what you paid for your house or your business property.
Because the middle class lives mainly in neighborhoods where all the houses are similar, appraisal districts are able to do a good job at guessing at the values. Studies show the houses tend to sell for close to their appraised values.
But very expensive houses and commercial properties almost always sell for considerably more than the amount listed on the tax rolls.
The gap was illustrated earlier this week when Dallas officials told a state Senate hearing they want to change the law to require price disclosure on real estate sales.
Support for the change swelled in Dallas after the city found itself having to pay about $42 million for a piece of commercial property listed on the tax rolls as being worth $7.3 million.
The change won’t happen, though. The people who are paying more than their share are afraid to tell the state how much they paid for fear their appraisal will go from, say, $220,000 to $240,000.
We’ve discussed this issue before – as we know, legislation to require sales price disclosure came up last session and will surely be introduced next year as well. The thing is, I don’t see the objection Casey raises as being an intractable problem. Far from it, in fact: it should be a fairly straightforward matter to do some math, estimate how much revenue could be raised this way, and then point out that with a more accurate method of appraising high-end properties, the tax rate can be reduced, giving some real relief to the homeowners Casey frets about. This really shouldn’t be that hard to get public support. Getting it past the lobbyists is another matter, but then it always is. The first step, though, should be very doable.