The bill amends Section 23.23(a) of the Texas Tax Code to limit the increase in the appraised value of a residence homestead for ad valorem taxation. Specifically, it changes the allowable increase from a maximum of 10 percent to a maximum of 5 percent of the appraised value from the preceding tax year. The new language specifies that the appraisal office may increase the appraised value to an amount not exceeding the lesser of the market value determined in the most recent tax year or the sum of the 5 percent increase, the appraised value from the preceding year, and the market value of any new improvements made to the property.

This Act will only apply to tax years beginning on or after its effective date of January 1, 2026, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature in 2025. If the amendment is not approved by voters, the Act will have no effect.

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