Wood County Appraisal District

STATE PROPERTY TAX CODE SECTION 23.12

1. BACKGROUND
2. State Property Tax Code Section 23.12 states that the market value of inventory is the price for which it would sell as a unit to a purchaser who would continue the business.
3. Based on State Property Tax Code Section 23.12 the Chief Appraiser shall establish one procedure for the equitable and uniform appraisal of inventory for taxation and apply generally accepted appraisal techniques in computing the market value of residential real property inventory.

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• CRITERIA:
• The following properties do not qualify for inventory valuation:
• Undeveloped lots, Vacant Acreage and Model Homes which are not listed for sale January 1^st of the tax year.
• To qualify for the residential real property inventory valuation, a completed form 50-143, Rendition of Real Property must be submitted by the property owner or designated agent no later than April 15^th, except as provided by Tax Code Section 22.02. On written request by the property owner, the Chief Appraiser shall extend the deadline an additional 15 days upon good cause shown in writing by the property owner per the Tax Code Section 22.23. This form must be completed each year to qualify.

• The property within a residential subdivision must be for sale in the normal course of business. Undeveloped lots do not qualify, as they are not ready for sale in the normal course of business. This property will be valued as raw acreage land. Property must be planned for construction, or under construction as of January 1^st. If the Appraisal District is unable to find proof that the property was actively listed for sale or planned for construction, we may require proof be provided by the other. Failure to provide proof may result in loss of qualification.

• Section. 9.4013. Texas Property Tax Law

                      Real Property Inventory Appraisal

• A real property inventory is one or more platted lots or tracts, and improvements, if any, meeting the following criteria:

1. They are under the same ownership;
   1. They are contiguous to one another or are located in the same subdivision of development;
   1. They are held for sale in the ordinary course of business;
   1. They are subject to zoning restrictions limiting them to Residential use, or, if not subject to zoning, they are:
      1. Subject to enforceable deed restrictions limiting them to residential use, or
      1. Their highest and best use is as residential property; (can not be Ag properties)
   1. They have never been occupied for residential purpose; AND
   1. (a) they are not presently leased or producing income. (Ag value is income based, you cannot have inventory Market Value on property that qualifies for Ag Appraisal; one or the other, not both)
2. A residential real property inventory shall be appraised as a unit at the price for which it would transfer to another person continuing the business, using generally accepted techniques for the appraisal of subdivisions and similar properties.

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• NECESSARY DOCUMENTATION TO QUALIFY FOR INVENTORY VALUATION:

1. A separate rendition list of account numbers or legal descriptions if account numbers are not known, for each subdivision or group of contiguous accounts in a subdivision, grouped as vacant property or improved property with the percent complete of the improvements as of January 1^st, of the Tax Year. List only those properties that meet the inventory criteria.
2. For Developers: The owner or representative shall disclose cost of acquisition on land as well as infrastructure cost (Cost to Develop the Subdivision). If lots are selling to builders the lot prices (Take Down) must be disclosed and if lots are selling to individuals these lot prices must be disclosed. All sales will be disclosed. Closing / settlement statements are preferred on original land acquisitions. Schedules are fine for lot sales and improved properties sales.
3. For Builders: The owner or representative must disclose asking prices, the acquisition cost for the residential lots and the cost of construction and percent complete as of January 1^st of the year of appraisal for improved properties. If lots are selling to individuals the lot prices must be disclosed also. All sales will be disclosed.
4. Details such as: Total lots within the subdivision development and Yealy absorption rate are also necessary.
5. Dated / older sales on land acquisition for subdivision development shall be addressed for time adjustments.
6. Disclosure must be based on owner’s books and records each year of appraisal. Additional information may be requested and notarization may be required.
7. An analysis will be made with the actual COST TO DEVELOP, and MARKET DATA. Generally accepted rules of appraisal will be used to generate an appropriate inventory value.

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• The State Comptroller form (50-143), which basically requests the same data we are requesting, will be used, with documentation attached.

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APPLICATION PROCESSING

The following procedure is to be used by the Wood County Appraisal District Staff following the reception of a completed form 50-143, Rendition of Real Property Inventory application:

Clerk:

1. Mark the application with the appropriate date stamp for the date received.
2. Scan the rendition to the appropriate accounts under the following image type – DD FORM, record type – DD, sub type – all.
3. Deliver the application to the appropriate receptacle for an appraiser to process

Appraiser:

1. Verify the image has been appropriately scanned to the correct accounts, if the property is an Undivided Interest Owner (UDI), verify all ownership accounts received the scan
2. Verify qualification of property via aerial imagery, and or field inspection
3. Apply or verify the O State Code is selected for all appropriate land and improvement segments

Annual Rela Property Inventory Review

Each year between January 1^st and the anticipated date for notices of appraised value to be mailed out, the appointed appraiser should follow the procedure listed below to verify all properties with the real property inventory valuation.

1. In PACS, perform a property search under the State Code for O property types
2. Verify the ownership has not changed from the original applicant and has a completed form 50.143, Rendition of Real Property Inventory on file under the current owner(s) name.
3. Verify the property is still qualified under the general requirements above.
4. Verify the appropriate economic adjustments are accurate and in place for all land and improvements
5. If ownership has changed, or the property is no longer qualified, remove the economic adjustments as appropriate and correct the State Code to the designated property type, (i.e. A1 for single family home, C1 for vacant subdivision lot, etc.)
6. If an updated rendition is required, send the property letter in PACS entitled RPI – COVER LETTER, along with a blank form 50-143, with a listing of properties under the ownership that is requested.

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Application form 50-143