New Property Tax Law Interpretation Will Cost San Angelo Seniors Thousands

SAN ANGELO, Texas — The Tom Green County Appraisal District is changing how it has handled property taxes for San Angelo retirement communities for the past 34 years. These changes could cost residents of these communities hundreds, if not thousands, of dollars annually.

At the center of the issue are homestead exemptions for properties at Rio Concho West, 6359 Appaloosa Trail, off FM 2288; Rio Concho Patio Homes, 401 Rio Concho Dr.; and the Baptist Memorial Northgate homes at 903 N. Main St. Village East, 4054 Sul Ross, is also impacted.

These are retirement communities where residents purchase the right to live in the homes for the rest of their lives. Residents also pay a monthly maintenance fee. Upon their death, the property reverts to the property development manager — or example either Rio Concho Inc., Baptist Memorial, or Village East.

Up until this year, the appraisal district classified each residence in these developments as a single-family home, allowing the occupants to claim homestead exemptions, as well as exemptions for being over 65 or disabled veterans. However, Tom Green County Chief Appraiser Tyler Johnson argued that because of the way the real estate transaction is conducted, the properties are actually owned by Rio Concho, Village East, or Baptist Memorial, not the individual residents. As a result, the properties do not qualify for these exemptions.

Johnson notified property managers in May 2024 about the change, meaning residents could face increased taxes for the next appraisal year, pending the outcome of protests.

Lisa Elsass, executive director of Rio Concho, oversees four property groups, including Rio Concho West, Rio Concho Patio Homes, Rio Concho Manor, and Rio Concho Terrace. The first two developments are affected by the appraisal district's new interpretation of the property tax law. Rio Concho Manor and Rio Concho Terrace are tax-exempt under 501(c)(3) status, with Rio Concho Manor also being subsidized by the U.S. Department of Housing and Urban Development (HUD).

Elsass said the appraisal district's rule change will generate $302,531 in additional revenue from Rio Concho West for the school district, city, and county. She explained that if the increase is spread equally among the 208 units in Rio Concho West, it would cost seniors an extra $982 per year. For the six disabled veterans living there, the additional cost would be over $2,000 per year. At the 61-unit Rio Concho Patio Homes, the rule change will add $471 annually to each resident's taxes and increase tax revenue nearly $30,000 to the taxing entities.

Johnson described the previous classification of these properties as a mistake. "It's an ownership issue. The residents do not own the homes where they live," he said. Texas law specifies that ownership is required to claim a homestead exemption. Alternatively, a lifetime estate trust could be established, which would allow the property to qualify for the exemption.

A lifetime estate trust occurs when the property owner transfers the right of habitation to another person until their death. Rio Concho, however, offers what is called a lifetime lease, which does not legally qualify for homestead exemptions under the county appraisal district's interpretation of the rules.

City zoning laws make breaking up the individual residences in the Rio Concho properties difficult in order to create lifetime estate trusts. The properties will need separate water meters and sewer lines, for example. And, the lifetime estate trusts will need to be recorded at the courthouse.

Elsass said that in 1990, an agreement was made between Rio Concho and the appraisal district to treat these residences as single-family homes and tax them based on who resides there. However, that agreement is no longer being recognized.

Johnson, tasked with enforcing state laws regarding appraisals, said the law does not allow these communities to qualify the properties for homestead exemptions.

Rio Concho's application for nonprofit status and eligibility for homestead exemptions was denied by the appraisal district in September. Elsass said she is appealing the decision to the Tom Green County Appraisal Review Board on Oct. 10. She added that she has minutes from the 1990 ARB meeting where the original agreement was made.

The new interpretation of the law is expected to generate a total of approximately $330,000 in additional property tax revenue from the Rio Concho developments for the San Angelo ISD, Tom Green County, and the City of San Angelo, which will be divided among the three entities.