House Bill No. 375 amends the Texas Tax Code to refine the regulations surrounding the appraisal of real property for ad valorem tax purposes. Key changes include the modification of Section 1.12(d) to clarify the appraisal ratio for properties under Section 23.23, the renaming of Section 23.23 from "Residence Homestead" to "Real Property," and the expansion of the definition of "real property" to encompass manufactured homes that qualify as residence homesteads. The bill introduces a provision allowing appraisal offices to increase the appraised value of real property by a maximum of 3.5% of the previous year's appraised value, alongside the market value of new improvements, while also establishing conditions for the expiration of this limitation.

Additionally, the bill repeals several sections from previous legislation, including those related to the circuit breaker limitation on appraised value, and clarifies the process for property owners to protest appraised values and the required information in notices from the chief appraiser. 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, which would allow 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 provisions of this bill will not take effect.

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