Summary:

 House Bill 377 (HB 377) amends the definition of “residential property” for property tax purposes and revises valuation methods for multiple like-kind properties and contiguous tracts owned by a single taxpayer. It also modifies requirements for property transfer affidavits, mandates the inclusion of comparable sales data in valuation notices, and prohibits penalties or interest on delinquent taxes if valuation notices are not timely mailed. HB 377 applies to property tax years beginning on or after January 1, 2026. 

Legislation Overview:

 House Bill 377 (HB 377) revises the Property Tax Code by modifying the definition of “residential property” to include tracts that are not zoned for commercial, industrial, or agricultural use, excluding temporary lodging structures such as hotels and motels. The bill also establishes valuation methods requiring multiple like-kind properties within a county and owned by a single taxpayer to be valued as if sold in a single transaction. Additionally, contiguous tracts under the same ownership must be valued collectively as a single property.

The bill eliminates the requirement to file an affidavit with the county assessor for property transfers involving residential land without a structure. It mandates that valuation notices include all comparable sales data used in property assessments. HB 377 also prohibits penalties and interest for delinquent property taxes if the valuation authority fails to timely mail valuation notices to the property owner. These provisions apply to property tax years beginning on or after January 1, 2026.

Implications

HB 377 will affect property tax administration by changing valuation methods and notification requirements. The bill may reduce administrative burdens on taxpayers by eliminating unnecessary affidavits for certain property transfers, but it could increase administrative workload for assessors due to the need to incorporate comparable sales data in valuation notices.

The new valuation methodology for multiple like-kind properties and contiguous tracts could impact tax revenue distribution by altering how properties are assessed. If valuations decrease due to bulk sale assumptions, local governments relying on property tax revenue may see fiscal impacts. However, the bill’s provision preventing penalties and interest on delinquent taxes when valuation notices are not timely mailed enhances taxpayer protections. 

Current Law:

 Under current law, “residential property” is defined more narrowly, and valuation of multiple properties or contiguous tracts does not require collective assessment. Property transfer affidavits are required for all residential property transactions, regardless of whether structures are present. There is no existing requirement for valuation notices to include comparable sales data, and penalties and interest on delinquent property taxes are assessed regardless of whether valuation notices are mailed on time.