Texas Tax Code 11.181 – Charitable Organizations Improving Property for Low-Income Housing
(a) An organization is entitled to an exemption from taxation of improved or unimproved real property it owns if the organization:
(1) meets the requirements of a charitable organization provided by Sections 11.18(e) and (f);
(2) owns the property for the purpose of building or repairing housing on the property primarily with volunteer labor to sell without profit to an individual or family satisfying the organization’s low-income and other eligibility requirements; and
(3) engages exclusively in the building, repair, and sale of housing as described by Subdivision (2), and related activities.
(b) Property may not be exempted under Subsection (a) after the fifth anniversary of the date the organization acquires the property. Property that received an exemption under § 11.1825 and that was subsequently transferred by the organization described by that section that qualified for the exemption to an organization described by this section may not be exempted under Subsection (a) after the fifth anniversary of the date the transferring organization acquired the property.
Terms Used In Texas Tax Code 11.181
- Appraisal: A determination of property value.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Market value: means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
(A) exposed for sale in the open market with a reasonable time for the seller to find a purchaser;
(B) 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
(C) 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. See Texas Tax Code 1.04 - Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Property: means real and personal property. See Texas Government Code 311.005
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Real property: means :
(A) land;
(B) an improvement;
(C) a mine or quarry;
(D) a mineral in place;
(E) standing timber; or
(F) an estate or interest, other than a mortgage or deed of trust creating a lien on property or an interest securing payment or performance of an obligation, in a property enumerated in Paragraphs (A) through (E) of this subdivision. See Texas Tax Code 1.04 - Tax year: means the calendar year. See Texas Tax Code 1.04
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) An organization entitled to an exemption under Subsection (a) is also entitled to an exemption from taxation of any building or tangible personal property the organization owns and uses in the administration of its acquisition, building, repair, or sale of property. To qualify for an exemption under this subsection, property must be used exclusively by the charitable organization, except that another individual or organization may use the property for activities incidental to the charitable organization’s use that benefit the beneficiaries of the charitable organization.
(d) For the purposes of Subsection (e), the chief appraiser shall determine the market value of property exempted under Subsection (a) and shall record the market value in the appraisal records.
(e) If the organization that owns improved or unimproved real property that has been exempted under Subsection (a) sells the property to a person other than an individual or family satisfying the organization’s low-income or other eligibility requirements, a penalty is imposed on the property equal to the amount of the taxes that would have been imposed on the property in each tax year that the property was exempted from taxation under Subsection (a), plus interest at an annual rate of 12 percent calculated from the dates on which the taxes would have become due.
(f) The charitable organization and the purchaser of the property from that organization are jointly and severally liable for the penalty and interest imposed under Subsection (e). A tax lien in favor of all taxing units for which the penalty is imposed attaches to the property to secure payment of the penalty and interest.
(g) The chief appraiser shall make an entry in the appraisal records for the property against which a penalty under Subsection (e) is imposed and shall deliver written notice of the imposition of the penalty and interest to the charitable organization and to the person who purchased the property from that organization.