House Bill No. 375 amends the Texas Tax Code to revise the limitations on increases in the appraised value of real property for ad valorem tax purposes. It modifies Section 1.12(d) to clarify the appraisal ratio for properties under Section 23.23, while removing references to Section 23.231. The bill changes the heading of Section 23.23 from "Residence Homestead" to "Real Property," thereby expanding the limitation on appraised value to encompass all real property, not just residence homesteads. New provisions allow appraisal offices to increase the appraised value by a maximum of 3.5% of the previous year's value, along with the market value of any new improvements. The bill also outlines conditions under which the limitation on appraised value expires and defines "new improvement," including manufactured homes as qualifying real property.

Additionally, the bill repeals several sections from previous legislation, including Section 4.12 of Chapter 1 from the Acts of the 88th Legislature, as well as Sections 23.23(c-1), 23.231, and 25.19(o), indicating a significant shift in property appraisal processes. The bill is set to take effect on January 1, 2026, but its implementation is contingent upon the approval of a constitutional amendment proposed by the 89th Legislature in 2025. This amendment would authorize the legislature to limit the maximum appraised value of real property for ad valorem tax purposes to 103.5% or more of the previous year's appraised value; if the amendment is not approved by voters, the bill's provisions will not take effect.

Statutes affected:
Introduced: Tax Code 1.12, Tax Code 23.23 (Tax Code 23, Tax Code 1)