Texas Property Tax Definitions

It is important for taxpayers’ to understand for property tax purposes, the following legal definitions use in the Texas Tax Code (Code):The term “Property” is defined as any matter or thing capable of private ownership.

When we describe “Real Property,” The Code identifies it as follows:

  1. Land
  2. An improvement
  3. A mine or quarry
  4. A mineral in place *
  5. Standing timber *
  6. An estate or interest

*It is interesting to note that when minerals and timber are removed from the ground they become “Personal Property.”

To identify “Improvements” The Code defines them as follows:

  1. A building, structure, fixture, or fence erected on or affixed to land;
  2. A transportable structure that is designed to be occupied for residential or business purposes, whether or not it is affixed to land, if the owner of the structure owns the land on which it is located, unless the structure is unoccupied and held for sale or normally is located at a particular place only temporarily; or
  3. For purposes of an entity created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, the:
    1. Subdivision of land by plat;
    2. Installation of water, sewer, or drainage lines; or
    3. Paving of undeveloped land.
    • Notwithstanding anything contained herein to the contrary, a manufactured home is an improvement to real property only if the owner of the home has elected to treat the manufactured home as real property.

*The Code identifies “Personal Property” as property that is not real property.
*Sometimes in the appeal process issues develop between the appraisal districts and taxpayers’ in defining what is Real Property and what is Personal Property. For example, are built-in fixtures in a commercial property real or personal property?

“Market Value” is the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:

  1. exposed for sale in the open market with a reasonable time for the seller to find a purchaser;
  2. both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use; and
  3. both the seller and purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.

“Appraised Value” means the value determined as provided by Chapter 23 of this code, which deals with methods and procedures.

“Assessed Value” means, for the purposes of assessment of property for taxation, the amount determined by multiplying the appraised value by the applicable assessment ratio, but, for the purposes of determining the debt limitation imposed by Article III, Section 52, of the Texas Constitution, shall mean the market value of the property recorded by the chief appraiser. Translated this would mean the Appraised Value less any exemptions, or any other tax mandated deductions would equal the Assessed Value or Taxable Value.

The Code definition of “Taxable Value” is the amount determined by deducting from assessed value the amount of any applicable partial exemption.

“Partial Exemption” means an exemption of part of the value of taxable property.

“Tax Year” means the calendar year.

*”Assessor” means the officer or employee responsible for assessing property taxes as provided by Chapter 26 of this code for a taxing unit by whatever title he is designated.
*”Collector” means the officer or employee responsible for collecting property taxes for a taxing unit by whatever title he is designated.
*In Texas we refer to the Assessor/Collector as one in the same. In some appraisal districts they perform the Assessor/Collector duties for some political subdivisions. Some argue that the function of appraising properties and tax collections should be combined and administered by appraisal districts. This would make the property tax system simpler for taxpayers’.

“Clerical Error” means an error:

  1. that is or results from a mistake or failure in writing, copying, transcribing, entering or retrieving computer data, computing, or calculating; or
  2. that prevents an appraisal roll or a tax roll from accurately reflecting a finding or determination made by the chief appraiser, the appraisal review board, or the assessor; however, “clerical error” does not include an error that is or results from a mistake in judgment or reasoning in the making of the finding or determination.