H.B. No. 490 proposes significant amendments to the Texas Tax Code concerning the appraisal 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, removing references to Section 23.231, and repeals a previous amendment to Section 1.12(d) that was set to take effect in 2027. Additionally, the heading of Section 23.23 is updated to specify that it applies to "real property" rather than just "residence homestead." New subsections are introduced to outline conditions under which appraisal offices can increase the appraised value of real property, including a cap on increases and provisions for property transfers between spouses. The definition of "new improvement" is expanded to include enhancements that increase market value, and manufactured homes are recognized as real property under certain conditions.

The bill also repeals several sections, 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 shift in property appraisal practices. H.B. No. 490 will apply to property appraisals for tax years beginning on or after January 1, 2026, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature in 2025. This amendment aims to authorize the legislature to limit the maximum appraised value of real property for ad valorem tax purposes to 105 percent or more of the appraised value from the previous tax year. 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)