The effect of a tax certificate accompanying a transfer of certain property

Texas Senate Bill 2173, effective September 1, 2025, modifies the Texas Tax Code to protect property buyers from unexpected tax liabilities due to prior owners' errors. Specifically, it addresses situations where a previous owner erroneously received a residence homestead property tax exemption that was later canceled. Under the new law, if a property transfer involves a tax certificate indicating no delinquent taxes, and the transfer is between parties with close personal or business relationships—such as family members, employers and employees, or parent companies and subsidiaries—the tax lien is not extinguished if the error involved a canceled homestead exemption. This change aims to prevent buyers from being held responsible for up to five years of back taxes resulting from the previous owner's mistake. ([legiscan.com](https://legiscan.com/TX/supplement/SB2173/id/594808?utm_source=openai))

The Texas Public Policy Foundation has expressed support for SB 2173, highlighting its potential to protect property buyers from unexpected tax liabilities. They commend the bill for addressing issues related to erroneous homestead exemptions and for promoting property rights and personal responsibility. ([texaspolicyresearch.com](https://www.texaspolicyresearch.com/bills/89th-legislature-sb-2173/?utm_source=openai))

No significant negative media coverage or opposition to SB 2173 has been reported. The bill passed unanimously in both the House and Senate, indicating broad bipartisan support. ([legiscan.com](https://legiscan.com/TX/votes/SB2173/2025?utm_source=openai))