Texas Tax Code 23.76 – Change of Use of Land
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(a) If the use of land that has been appraised as provided by this subchapter changes, an additional tax is imposed on the land equal to the difference between the taxes imposed on the land for each of the three years preceding the year in which the change of use occurs that the land was appraised as provided by this subchapter and the tax that would have been imposed had the land been taxed on the basis of market value in each of those years.
(b) A tax lien attaches to the land on the date the change of use occurs to secure payment of the additional tax imposed by this section and any penalties and interest incurred if the tax becomes delinquent. The lien exists in favor of all taxing units for which the additional tax is imposed.
Terms Used In Texas Tax Code 23.76
- 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. See Texas Tax Code 1.04
- 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 - Population: means the population shown by the most recent federal decennial census. See Texas Government Code 311.005
- Taxing unit: means a county, an incorporated city or town (including a home-rule city), a school district, a special district or authority (including a junior college district, a hospital district, a district created by or pursuant to the Water Code, a mosquito control district, a fire prevention district, or a noxious weed control district), or any other political unit of this state, whether created by or pursuant to the constitution or a local, special, or general law, that is authorized to impose and is imposing ad valorem taxes on property even if the governing body of another political unit determines the tax rate for the unit or otherwise governs its affairs. See Texas Tax Code 1.04
- Year: means 12 consecutive months. See Texas Government Code 311.005
(c) The additional tax imposed by this section does not apply to a year for which the tax has already been imposed.
(d) If the change of use applies to only part of a parcel that has been appraised as provided by this subchapter, the additional tax applies only to that part of the parcel and equals the difference between the taxes imposed on that part of the parcel and the taxes that would have been imposed had that part been taxed on the basis of market value.
(e) A determination that a change in use of the land has occurred is made by the chief appraiser. The chief appraiser shall deliver a notice of the determination to the owner of the land as soon as possible after making the determination and shall include in the notice an explanation of the owner’s right to protest the determination. If the owner does not file a timely protest or if the final determination of the protest is that the additional taxes are due, the assessor for each taxing unit shall prepare and deliver a bill for the additional taxes as soon as practicable after the change of use occurs. The taxes are due and become delinquent and incur penalties and interest as provided by law for ad valorem taxes imposed by the taxing unit if not paid before the next February 1 that is at least 20 days after the date the bill is delivered to the owner of the land.
(f) The sanctions provided by Subsection (a) do not apply if the change of use occurs as a result of:
(1) a sale for right-of-way;
(2) a condemnation; or
(3) a transfer of the land to this state or a political subdivision of this state to be used for a public purpose.
(g) If the use of the land changes to a use that qualifies under Subchapter C, D, or H of this chapter, the sanctions provided by Subsection (a) of this section do not apply.
(h) The use of land does not change for purposes of Subsection (a) solely because the owner of the land claims it as part of the owner’s residence homestead for purposes of § 11.13.
(i) The sanctions provided by Subsection (a) do not apply to land owned by an organization that qualifies as a religious organization under § 11.20(c) if the organization converts the land to a use for which the land is eligible for an exemption under § 11.20 within five years.
(j) The sanctions provided by Subsection (a) do not apply to a change in the use of land if:
(1) the land is located in an unincorporated area of a county with a population of less than 100,000;
(2) the land does not exceed five acres;
(3) the land is owned by a not-for-profit cemetery organization;
(4) the cemetery organization dedicates the land for a cemetery purpose;
(5) the cemetery organization has not dedicated more than five acres of land in the county for a cemetery purpose in the five years preceding the date the cemetery organization dedicates the land for a cemetery purpose; and
(6) the land is adjacent to a cemetery that has been in existence for more than 100 years.
(k) In Subsection (j), “cemetery,” “cemetery organization,” and “cemetery purpose” have the meanings assigned those terms by § 711.001, Health and Safety Code.