If you hear people talking about “real property,” they generally are speaking about their land and home. They could also talk about a building they own or rent out. The term real estate is usually thrown around in the same way. But what is “real property” in Texas?
There is a legal definition that is important for tax codes, property rights such as buying or selling, inheritance laws, and other reasons. It is good to know what is meant by the term “real property” to understand the law and how it applies to your life.
Learn about what real property includes in Texas and how your ownership of real property can affect you and your family.
Real Property Is 5 Things
1. The Land Itself and Anything Growing There
- Trees or other naturally occurring vegetation, weeds, grass, or other plants
- Crops
- Seeds
2. The Structures Built on and Affixed to the Land
- Homes and the materials to build them
- Other buildings
- A fixture such as a lamppost or a gravestone
- Streets and driveways
- Fences
- A transportable structure for residential or business purposes, whether or not it is attached to the land, as long as you own the land
- A manufactured home if the owner treats it as real property. The owner must also have a statement of ownership filed with the county’s real property records.
- Paving or platting of undeveloped land
3. The Structures Underneath the Land
- Naturally occurring structures like roots or rocks such as mines or quarries and any liquids or other minerals
- Utilities such as gas and cable lines, water pipes
- Sewers and drainage lines
4. Airspace Above the Land
5. The Interest, Benefits, and Rights of Ownership
You have the right to:
- Sell your property
- Lease your property
- Possess your property
- Enjoy the benefits of your property
- A lienholder has the right to an estate or interest (other than a mortgage or deed of trust)
Different Types of Property
“Personal Property is everything that is not your “Real Property.” You cannot leave personal property to someone else when you die with a Transfer on Death Deed, but you can give real property in this manner. A Transfer on Death Deed is a popular way to leave real property to someone because the property steps up in basis, and the person who inherits will not have to pay capital gains taxes on the property.
“Real property” is more than just “real estate” because it also includes your rights as an owner.
Real Property and Taxes
Your taxes often depend on how your real property is classified. Governmental organizations organize real property into general categories, including:
- Residential
- Commercial
- Agricultural
- Industrial
- Special purpose
It is crucial for tax purposes to know how your property is classified. Current property use is the primary consideration in determining appropriate property classification.
Wrong Reporting = Wrong Taxes
Appraisal district reporting of misclassified local value – value reported in the wrong category – may lead to inaccurate taxable value estimates. Taxable value estimates determine state funding for schools. Consequently, misclassification by appraisal districts may impact school funding.
If your home is in a subdivision, it is usually single-family residential. The use of the property determines the category. All non-farm or ranch, single-family residential properties are part of this category (unless the homes are inventory for a builder)
Tax Classification of Real Property
If you are unsure how your tax assessor is currently categorizing your home, look at your tax bill. Contact your Appraisal District to settle any disputes with an appraisal. If you need help with resolving issues with the Appraisal District, appeal to the Appraisal Review Board.
The Statesman.com reports on a woman who received a tax assessment on her home that was $25,000 more than her neighboring homes. She was shocked and finally worked with the appraiser and the Board to have her home reassessed. At that point, her taxable value dropped to that of her neighbors. However, she received no refund for her overpayments.
Stay on top of your taxes by keeping track of your home’s value and it’s classification as real property. Paying attention could save you quite a bit of money in the long run. If you are facing foreclosure due to an inability to pay your property taxes, consult an attorney to find answers.
Find Help
If you have real property issues with a governmental appraiser or taxation district, give us a call at Jarrett Law. We handle property disputes of all kinds and would be happy to work with you to resolve problems related to your real property. Our focus is exclusively on property tax foreclosure, real estate, property disputes, taxation-related issues, foreclosures, and other property problems you face as a property owner. Contact us today online or give us a call to set up your free consultation.
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