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By Giulia CarbonaroShareNewsweek is a Trust Project memberTexas voters may have strengthened the state’s attractiveness to foreign real estate investors when they approved 17 constitutional amendments last month, some of which have a direct impact on the housing market, according to expert Yuvan Golan.
“Texas is already the third-most popular destination among foreign buyers, and among the top three for Waltz’s international customers,” Golan, founder and CEO of property and real estate platform for international buyers Waltz, said in a statement shared with Newsweek.
Some of the amendments, he said, have the potential to have a major impact on the state and make it even more enticing to foreign buyers.
What Amendments Did Texas Voters Pass?
Most of the 17 constitutional amendments approved by a majority of Texas voters last month have to do with taxes. Specifically, either they restrict the creation of certain taxes or give the green light to new exemptions.
These are some of the ones that have a direct impact, or could have an impact, on the state’s housing market.
Proposition 10, the amendment which received the most backing by Texas voters (89 percent), temporarily lowers homeowners’ property taxes if their home is destroyed in a fire.
Proposition 11, approved by 78 percent of voters, allows the state to raise the homestead exemption for elderly or disabled Texans, and Proposition 7, approved by 86 percent of voters, provides property tax breaks on homes of spouses of U.S. veterans who died in connection to their service—as long as they have not remarried.
...Also related to property taxes, Proposition 13, backed by 79 percent of voters, increases the homestead exemption for all homeowners in the state, and Proposition 17, which received the support of 57 percent of voters, allows the state to prevent property values near the border from increasing due to border security infrastructure and related improvements.
Proposition 8, backed by 72 percent of voters, forbids the state from imposing inheritance taxes and from taxing an estate or inheritance when they are transferred.
Another key amendment for Golan is not directly linked to housing—but it could have a direct impact on the state’s real estate market.
This is Proposition 2, backed by 65 percent or more than 1.9 million voters, which bans Texas from taxing people or businesses on profits or potential profits from capital assets such as investments, real estate, valuable items and certain personal property.
What Effect Could the Amendments Have?
According to Golan, some of these amendments will make the state particularly appealing to foreign real estate investors looking for a good deal.
The amendment that bans capital gains taxes, for one, means that “investors can sell property at a gain without the state of Texas sticking its hand out for a cut,” Golan said.
“This is especially beneficial to flippers who have built significant equity in a property through renovation, as well as investors who have built significant equity through market appreciation.”
The same tax advantage could also convince more U.S. businesses to move to Texas, Golan thinks. Several major companies—including Tesla, HP, and Chevron—have already moved their headquarters from California to Texas in recent years due to friendlier tax treatment in the Lone Star State, he noted.
More companies are likely to follow in the coming years, he said—a move which might lead to a continuous growth in population for the state, as job seekers flock to these new hiring opportunities.
“These new residents need places to either buy or rent,” Golan said. “That makes real estate developers, flippers, and landlords the direct beneficiaries.”
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