In 2015, Texas voters overwhelmingly passed a constitutional amendment to increase the homestead exemption from $15,000 to $25,000 for public-school tax valuations. Texas REALTORS® was instrumental in passing this measure, which would provide a significant benefit to homeowners. When three school districts tried to take advantage of this amendment to the detriment of property owners, Texas REALTORS® stepped in.

With backing from the association’s Issues Mobilization/Political Advocacy Fund, Texas REALTORS® legal and governmental affairs staff worked with outside counsel to file lawsuits in 2016 against school districts in Kilgore, Dumas, and White Deer to protect the local option homestead exemption. These lawsuits sought refunds of taxes wrongfully collected as a result of the school districts’ illegal reduction or repeal of previously adopted local option homestead exemptions.

The school districts challenged the Texas REALTORS® legal efforts, leading to multiple court hearings, discovery disputes, and proceedings at three courts of appeals, where Texas REALTORS® secured favorable rulings.

After six years in the court system, the school districts compromised and agreed to settle the Texas REALTORS® claims. The lawsuits were settled in the context of a class-action claim.

The efforts by Texas REALTORS® resulted in over 2,100 refunds across these three school districts totaling nearly $1 million:

  • Kilgore ISD: 1,447 refunds totaling $753,256
  • Dumas ISD: 735 refunds totaling $233,295
  • White Deer ISD: The number of affected homeowners was so low that it did not warrant moving forward with the class action process. Instead, the school district agreed to pay the named plaintiff a refund of $452.

This outcome is a huge win not only for the individual property owners who received refunds of improperly collected property taxes but also for property owners across the state. The litigation resulted in multiple appellate decisions in favor of property owners over taxing jurisdictions and disincentives similar egregious action in the future.

 

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July 22, 2024 | Texas REALTORS® Staff