The bill amends the Texas Tax Code to adjust the limitations on increases in the appraised value of certain properties for ad valorem tax purposes. Specifically, it allows appraisal offices to increase the appraised value of a residence homestead by a maximum of 2.5 percent of the appraised value from the previous year, as opposed to the previous limit of 10 percent. For other real properties, the maximum increase is set at eight percent, down from the previous limit of 20 percent. Additionally, the bill clarifies definitions related to property improvements and repeals several provisions from previous legislation that are no longer applicable.

The bill also includes a provision that requires a notice to be delivered to property owners, indicating that the appraised value of real property may not increase by more than eight percent each year, with certain exceptions. This act is set to take effect on January 1, 2026, contingent upon the approval of a constitutional amendment by voters that would allow the legislature to set these lower limits permanently. If the amendment is not approved, the bill will have no effect.

Statutes affected:
Introduced: Tax Code 23.23, Tax Code 23.231, Tax Code 25.19 (Tax Code 25, Tax Code 23)