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. The bill modifies Section 1.12(d) to clarify the appraisal ratio for properties under Section 23.23, while also changing the heading of Section 23.23 from "Residence Homestead" to "Real Property." This change expands the limitation on appraised value to encompass all real property, not just residence homesteads. The bill introduces provisions allowing 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 new improvements, and outlines the conditions under which these limitations apply.

Additionally, the bill addresses the expiration of appraisal limitations in cases of property transfer between spouses or changes in ownership among multiple owners. It defines "new improvement" to include manufactured homes qualifying as residence homesteads and repeals certain amendments from previous legislation that would have taken effect in 2027. The new provisions will apply to tax years beginning on or after the effective date of the Act, which is set for January 1, 2026, contingent upon voter approval of a constitutional amendment during the 89th Legislature's Regular Session in 2025. If the amendment is not approved, the provisions of this Act will not take effect.

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