For years many Texas homeowners paid excessive property taxes because their property had a higher and better use than residential.  For example, a home on a five acre hot corner could be taxed at its commercial land value, forcing an owner who wanted to stay to sell.

No longer.  The Property Tax Code now specifies, “The market value of a residential homestead should be determined solely on the basis of the property’s value as a residence homestead, not the highest and best use of the property.” (Tax Code S. 23.01).

Of course, the Legislature’s best intentions can also be abused.  Property Tax Protest has clients whose residential property is almost worthless except as commercial land.  In one case, a client’s improvements are valued under $10,000 and the total market value in 2009 was close to $1,000,000.  Needless to say, he has declared it a homestead and we’ll be protesting its value in 2010.