SB2173

Existing law protects a purchaser when a property transfer comes with a tax certificate incorrectly showing no delinquent taxes, penalties or interest, or failing to include property omitted from the appraisal roll. SB2173 expressly includes amounts later found due because a residence homestead exemption was wrongly allowed and then canceled: subject to the exceptions, the taxing unit’s lien is extinguished and the purchaser is relieved of the covered liability. This is not a new homestead exemption or a blanket cancellation of all unpaid property taxes. Final law, section 1; Prior tax-certificate rule.

The new homestead-error protection does not extinguish the lien if the chief appraiser or tax collector determines that the transfer was between people related within the first degree by blood, adoption or marriage; an employer and employee; a parent company and its subsidiary; or a trust and its beneficiary. First-degree relationships include parent and child and spouses, not every relative. The incorporated relationship rules also address relationships by marriage after divorce or death. Final law, new subsection (d); Blood and adoption rule; Degrees of blood relationship; Relationships by marriage; Degrees of marriage relationship.

Two important limits remain: a certificate obtained through fraud or collusion is void, and the person liable for the tax for the year it was imposed or the property was omitted remains personally liable for the tax, penalties and interest. Clearing the buyer’s lien does not forgive that person’s debt. The new law applies to certificates issued on or after September 1, 2025; earlier certificates remain governed by the law in force when issued. The controlling date is certificate issuance, not simply the sale date. Retained fraud and personal-liability rules; Final law, sections 1–3.

Changes during passage: The introduced, Senate committee, Senate-passed, House committee and final texts have the same operative provisions. The official amendment index lists no amendments, and both committees reported the bill without amendments. Introduced; Senate committee; Senate-passed; House committee; Final law; Version index; Amendment index.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Buyers in qualifying transactions get clearer protection against a later-discovered homestead-exemption error. Taxing units retain the original taxpayer’s personal liability and the specified related-party lien exception. Buyers and closing professionals still need a qualifying certificate; the act does not promise that every sale is free of liens. Final law.

The April 11 fiscal note anticipates no state fiscal implication and no significant local-government fiscal implication. Those estimates are not a finding that every affected taxpayer owes nothing or that no individual taxing unit could lose a particular lien. The bill makes no appropriation. Fiscal note.