2023 Texas Statutes › Property Code › Title 2 - Conveyances › Chapter 5 - Conveyances › Subchapter A. General Provisions › Section 5.010. Notice of Additional Tax Liability

Sec. 5.010.  NOTICE OF ADDITIONAL TAX LIABILITY.  (a)  A person who is the owner of an interest in vacant land and who contracts for the transfer of that interest shall include in the contract the following bold-faced notice:
NOTICE REGARDING POSSIBLE LIABILITY FOR ADDITIONAL TAXES
If for the current ad valorem tax year the taxable value of the land that is the subject of this contract is determined by a special appraisal method that allows for appraisal of the land at less than its market value, the person to whom the land is transferred may not be allowed to qualify the land for that special appraisal in a subsequent tax year and the land may then be appraised at its full market value.  In addition, the transfer of the land or a subsequent change in the use of the land may result in the imposition of an additional tax plus interest as a penalty for the transfer or the change in the use of the land.  The taxable value of the land and the applicable method of appraisal for the current tax year is public information and may be obtained from the tax appraisal district established for the county in which the land is located.
(b)  This section does not apply to a contract for a transfer:
(1)  under a court order or foreclosure sale;
(2)  by a trustee in bankruptcy;
(3)  to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest;
(4)  by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure;
(5)  by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust;
(6)  of only a mineral interest, leasehold interest, or security interest;  or
(7)  to or from a governmental entity.
(c)  The notice described by Subsection (a) is not required to be included in a contract for transfer of an interest in land if every transferee under the contract is:
(1)  a person who is a co-owner with an owner described by Subsection (a) of an undivided interest in the land;  or
(2)  a spouse or a person in the lineal line of consanguinity of an owner described by Subsection (a).
(d)  The notice described by Subsection (a) is not required to be given if in a separate paragraph of the contract the contract expressly provides for the payment of any additional ad valorem taxes and interest that become due as a penalty because of:
(1)  the transfer of the land;  or
(2)  a subsequent change in the use of the land.
(e)  If the owner fails to include in the contract the notice described by Subsection (a), the person to whom the land is transferred is entitled to recover from that owner an amount equal to the amount of any additional taxes and interest that the person is required to pay as a penalty because of:
(1)  the transfer of the land;  or
(2)  a subsequent change in the use of the land that occurs before the fifth anniversary of the date of the transfer.
Added by Acts 1997, 75th Leg., ch. 174, Sec. 1, eff. Jan. 1, 1998.