H.B. No. 273 introduces a new section, Section 23.232, which limits the increases in the appraised value of certain commercial real properties for ad valorem tax purposes. The bill defines "commercial real property" and establishes that appraisal offices can increase the appraised value to the lesser of the market value from the most recent tax year or a calculated sum that includes a 10% increase from the previous year's appraised value, plus the market value of any new improvements. This limitation will take effect on January 1 of the tax year following the first year of ownership and will expire when the property is no longer owned by the same owner or does not meet the definition of commercial real property.

The bill also amends existing sections of the Tax Code to clarify appraisal ratios and specifies that the new limitations do not apply to properties appraised under certain subchapters. It updates appraisal notice requirements to include information about the new limitations and broadens the applicability of valuation criteria by removing references to "residence homestead." Furthermore, it defines "taxable value," outlines deductions applicable to market value, and establishes that the comptroller will assess the validity of market values determined by appraisal districts. The bill is set to take effect on January 1, 2026, pending voter approval of a related constitutional amendment.

Statutes affected:
Introduced: Tax Code 23.23 (Tax Code 23)