If you are looking for the latest real estate legislation update for November 2023, you’ve come to the right place. Continue reading to find updates at the federal and state level to see if any recently signed or upcoming legislation impacts you as a homeowner, landlord, property manager, real estate investor, or citizen.
Katy PERRY Act
Have you heard of the Katy PERRY Act? Many people are familiar with the awarding winning musical artist and entertainer, Katy Perry, but how many know that her recent battles with the elderly founder of 1-800-FLOWERS to secure the purchase of his home have influenced potential new legislation that could be proposed in Congress in the future?
The Katy PERRY Act is also known as The Protect Elder Realty for Retirement Years Act which is how the acronym of the singer’s last name reads. The purpose of the Act is to protect senior citizens from financial exploitation and elder abuse. It has been endorsed by 36 legislators from the states of California, Missouri, Kansas, Rhode Island, New York, Oklahoma, Nevada, Montana, Wyoming, North Dakota, Texas, Arkansas, and New Mexico. The Act has not gone through any legislative process so far at the state or federal level.
Many states and the federal government have laws that address elder abuse today. An example is the Elder Justice Act which was passed by Congress in 2010 as part of Title XX of the Social Security Act. It established funding and support for programs and initiatives to allow federal protection to elders from elder abuse. It also supports training, elder justice research and innovation, Adult Protective Services systems, and covers some additional protections for senior citizens who reside in long-term care facilities.
The Katy PERRY Act could provide for a more specific application of elder abuse protection within the larger framework of elder justice. The Protect Elder Realty for Retirement Years Act would focus on real estate property sales and transfers. One of the main proposed provisions of the Act would be to institute a 72-hour grace period for certain transactions when one of the parties is over the age of 75 and the property is a personal residence. Either party would be able to back out of the agreement without any penalties.
In Katy Perry’s case that caused all of the media attention, she and her husband were involved in a purchase negotiated by her manager for 84 year old Carl Westcott’s $15M mansion in California. Mr. Westcott sued Katy Perry’s manager stating that he was not of sound mind to enter into the agreement when he sold his home and is seeking to be released from the deal. Wescott’s lawyers have claimed that he has Huntington’s disease and that he was on opioids for pain medication following back surgery. The lawyer for Perry’s manager has countered by saying Mr. Wescott was of sound mind when he hired a real estate agent and started listing and showing his home.
Although the facts and ultimate winner of the Perry/Westcott case will be decided in court unless settled out of court, the idea of protecting senior citizens, their homes, and the ability to pass on their homes to family will be an enduring concept that people will remain passionate about. In fact, AARP found in 2021 that 77% of adults 50 years of age and older want to stay and age in their homes. Having any type of common-sense legislation will help support those seniors in their goal.
Colorado Property Tax Updates
Colorado has been busy towards the end of 2023. Colorado legislators concluded a special session called the 2023 Extraordinary Session which cut property taxes by a whopping $434 million! Three bills helped to achieve these savings among other assistance for Coloradans. We’ll discuss these bills below.
Senate Bill 23B-001: Property tax relief for Colorado homeowners
Valuation changes in this bill include reducing the valuation for assessment for multi-family residential real property and all other residential real property to 6.7% of the amount equal to the actual value minus the lesser of $55,000 or the amount that causes the valuation to be $1,000. An additional consideration is being made for delinquent property taxes. Accrual of interest on delinquent property tax payments is now waived for the first payment of property taxes for the 2023 property tax year if a payment is made within 10 days after the mailing by the county treasurer of the property taxpayer’s tax statement or notification of an electronic statement. Property tax deadlines are now delayed due to the changes in the valuation.
House Bill 23B-1001: Providing $30 million more for rental assistance
This bill creates the Emergency Rental Assistance Grant Program for the next fiscal year. Recipients are eligible if they are residential tenants with annual household incomes of 80% or less than the area median income and are at risk of eviction or displacement. The grant is administered by the Division of Housing within the Department of Local Affairs. The division establishes contracts with non-profit organizations that will oversee disbursing the money and payments on behalf of recipients. Non-profits must report amounts and uses related to the awarded money.
Tenants apply through the statewide application portal. Grants can be used for the following:
- Paying rent past due and still owed, rent presently owed, and rent up to 2 months in advance
- Utility bills, late fees, court costs, reasonable attorney fees, and any other costs associated with preventing a tenant’s eviction
- Paying costs associated with relocation, including deposits and other move-in expenses
- Generating awareness of the grant program among tenants who are at risk of eviction or displacement
- Paying costs associated with following the division’s application review process
- Paying for housing stability services, as defined within the implementation guidelines of the federal department of the treasury
- Paying costs of administering the grant program.
By December 1, 2023, 15.1 million from the general fund and $14.9 million from the revenue loss restoration cash fund will be transferred to the grant program fund. Funds must be used by June 30, 2024.
House Bill 23B-1003: Creating a task force for a long-term property tax plan
The act creates a property tax commission to study and create a report with recommendations for a permanent and sustainable property tax structure for the state. The commission will consist of the following
- 4 members of the general assembly;
- The property tax administrator;
- A mayor or elected city council person;
- A current or former county assessor;
- The executive director of the Special District Association of Colorado;
- A chief financial officer of a school district;
- A representative of a statewide organization with expertise in school funding policy or that represents Colorado educators;
- A representative of an organization that represents Colorado commercial or residential property owners;
- A fire chief;
- A representative of an organization with expertise in advocating for low-income individuals, seniors, individuals with fixed incomes, or residential tenants;
- The executive director of a statewide or regional business organization; and
- 5 county commissioners representing the front range, mountain, eastern, southern, and western regions of the state, respectively.
One of the goals of the commission would be tor recommend future legislation that would create a property tax structure that considers protecting property owners from rising tax bills but is still supportive and sustainable for local governments and public schools. Some of the factors that would be considering when proposing future legislation would include:
- Impact to property owners and local taxing jurisdictions in different areas of the state,
- Impact to residential and nonresidential real property,
- Impact to school finance and the budgeting,
- Long-term impact to property owners and local taxing jurisdictions under different property value growth scenarios,
- Impact to housing affordability,
- Impacts to residential tenants, incentives for development, and the potential for lower property taxes for residences because of changing to a land value tax system,
- Disproportionate impacts of the rising tax bills on people with lower incomes and people with fixed incomes.
Texas Increases Property Tax Rebate
Texas homeowners and businesses will get an $18 billion property tax break due to voters approving Proposition 4 which will create one of the biggest property tax rebates in the state’s history according to a Fox News article. Over 80% of voters approved it.
Proposition 4 reads as follows: “The constitutional amendment to authorize the legislature to establish a temporary limit on the maximum appraised value of real property other than a residence homestead for ad valorem tax purposes; to increase the amount of the exemption from ad valorem taxation by a school district applicable to residence homesteads from $40,000 to $100,000; to adjust the amount of the limitation on school district ad valorem taxes imposed on the residence homesteads of the elderly or disabled to reflect increases in certain exemption amounts; to except certain appropriations to pay for ad valorem tax relief from the constitutional limitation on the rate of growth of appropriations; and to authorize the legislature to provide for a four-year term of office for a member of the board of directors of certain appraisal districts.”
This means that commercial property owners, investors, or those who own rental properties will have a max or upward limit on the amount of taxes that they will pay on real property. The exemption for homeowners is now more than double the previous amount. Last, certain exemption amounts will be increased for elderly or disabled homeowners. See video below for more information.
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