Should I disclose my home sale price to the county?

If you are a new homeowner in Texas, you may have received a survey from your county appraisal district asking you to voluntarily disclose your sale price. Appraisal districts also regularly announce on social media asking homeowners to disclose their sale price. e.g. here is an announcement from Fort Bend CAD,

Why homeowners don't disclose their sale price?

Texas is a non-disclosure state. You are not required to disclose your sale price to anyone - your friends, family or even to the local government agencies. Many homeowners balk at the idea of having to disclose their sale price. The most common arguments put forth to defend non-disclosure are:

• It's a violation of your privacy
• It increases your property tax

In reality, sold prices are always available on the MLS system. As per MLS listing rules, all listing agents have to promptly report back the sale prices to the MLS. So, anyone with access to the MLS can get all the sale prices in your neighborhood. That's all the realtors, brokers, agents and some appraisal districts too! Just that, you - the homeowner won't have access to sale prices in your neighborhood!

Your "private" sale price is not that private! Appraisal districts with access to MLS or MLS data sourced through a data vendor, will anyway get all the sale prices! CADs will then use the sale price data to base your assessment on. Hence, the arguments put forth in support of non-disclosure fall flat.

Why it is a good idea to disclose your sale price

If everyone in your neighborhood were to make their sale price public, then all homeowners will be empowered to fetch the right set of sales comps and counter the appraisal district's assessed value. This will help homeowners lower their property tax. Also, appraisal districts will not have to spend taxpayer funds on procuring sale price data, which is again a net saving for taxpayers.

Not disclosing your sale price hurts homeowners in more ways than one:

1. By law, appraisal districts are required to annually appraise your property to full market value. So appraisal districts need sale price. But, the non-disclosure law conflicts with this. Hence, CADs are left with no option but to either source the sale data from a vendor or to get it directly from the MLS system. And both of them come with a price tag. Guess, who pays for this? You - the taxpayer!
2. When the protest season arrives, appraisal districts are armed with all the sales data in the county and are better placed to put out sales comps to justify their higher assessment of your property. But, the homeowners are at a severe disadvantage - they do not have the sale prices in their neighborhood. So homeowners can't find appropriate comps to help lower their property value.
3. In case sale price is not available with them, appraisal districts often assign a higher value to your property. You will then have to protest the appraised value and submit your sale deed copy at the hearing. You end up providing your sale price to the appraisal district anyway! By disclosing your purchase price voluntarily, you can hope to see the same reflected in your noticed appraised value and avoid a protest the first year.

Hence, it is always a good idea to disclose your sale price to your county appraisal district.

Are home sales prices public record in Texas?

Nope, they are not! Texas is a non-disclosure state. Home sale prices are not public records. But, they are available on the MLS! Anyone with access to MLS can see the sale prices.

Will disclosing my sale price to the county increase my property taxes?

Not at all! That's a popular myth! Even if you don't disclose, appraisal districts will anyway procure the sale prices from vendors. As a taxpayer, you will end up paying for their purchase! Hence, voluntarily disclosing your sale price to the county works in your favor in the long term.

Why does Zillow not show sold prices?

Texas being a non-disclosure state, Zillow and other real estate portals cannot display sale prices.

How do I find out sale prices of properties in my neighborhood?

Texas is a non-disclosure state. Home sale prices are not public records. But, they are available on the MLS! Anyone with access to MLS can see the sale prices. You will have to approach a realtor. They can pull up the sale price info for you.

Sales price disclosure is a much needed reform. To quote from this article:

Texas appraisal districts lack the most complete and accurate basis for determining property values. This is like making a store clerk guess the correct sales tax on an item while you cover up the bar code and hide the price.

The result is that difficult-to-assess commercial properties and high-end homes tend to be undervalued. Owners of these properties therefore pay less than what they should in taxes that support public services, which then shifts the financial burden onto lower-income homeowners. Requiring reporting of all real estate transactions will be essential in correcting this imbalance and recognizing the changed values of property.