Water is a huge part of every property, regardless of whether it’s residential or commercial. But can or will it affect your property tax? In general, what should you know about the updated Water Code of Texas?

reformed property tax code

Water Code

The Water Code discusses the general and specific laws related to water use. It includes water administration, water rights, development, quality control, and more. Additionally, the water code also tackles the general and special law districts relating to this issue.

Basically, this code is made to address how water should be used. It also states how it affects you by way of the law. For example, if a river is included in your name, is it a taxable property? Or will creating a dam or pool increase your property appraisal?

According to the tax code, all real and tangible properties are taxable. That is unless the law exempts it.

For taxpayers, real properties being taxed are the norm. But what are tangible properties, and how do we know if it should be taxed?

Taxable Tangible Properties

By law, tangible properties are anything that can be touched or moved. Your furniture, money, and equipment are all tangible properties. That said, these are all included in the property tax you pay.

A water reservoir can’t be moved, technically. But as it is physical and can be touched, it is considered as a tangible property. That means that if you have a dam, pool, or some sort of water reservoir, it can affect your taxes.

For example, residential properties that have pools tend to have a higher appraisal rate. This is the appraised market value of the house. Once you have a higher market value, you normally have a higher property tax rate.

But with the Reformed Property Tax Code of Texas, the annual tax rap has a lower limit. From 8%, it has been approved to 3.5%. While not significantly lowering your tax rate, it helps you avoid its sudden growth.

You don’t have to be afraid of getting a higher property tax just because you have a pool. Once they go above 3.5% more than your previous year’s revenue, you can appeal your case. Doing so can help you get an even lower tax rate.

Tax hearings happen after a taxing unit has published the tax rate for the year. It’s best to get a realtor to help you with the process.

Water Rights and Management

Another important section of the Water Code of Texas pertains to your water rights or, specifically, your rights with the state water.

The state water is any natural flow of water from every possible source. Anything that the state uses is their property. It is possible to use the state water, but you have to acquire the right permit.

There are also several applicable uses to state water. For example, it can be used for both domestic and municipal uses. Most importantly, it should not pollute the state water in any way.

Additionally, there are requirements about the dimensions of the water reservoir you can make. You can create not more than 200 acre-feet of water. This is for fish and wildlife purposes.

But this is only applicable if the construction is qualified as an open-space land. You also don’t have to acquire a permit for these requirements.

According to the tax code, this exemption does not apply to commercial operations.

Before you start any construction involving state water, get your permit. It’s also best to talk with authorities regarding the policies.


The Reformed Property Tax Code of Texas aims to make tax easier for Texans. Another one of its goals is to make processes more transparent. By doing so, taxpayers have more control over what they’re paying for.


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