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, while also changing the heading of Section 23.23 from "Residence Homestead" to "Real Property." This change expands the appraisal limitation to encompass all real property, not just residence homesteads. The bill allows appraisal offices to increase the appraised value of real property by a maximum of five percent of the previous year's value, in addition to the market value of new improvements, and outlines specific conditions for these limitations. Furthermore, it introduces new subsections detailing the expiration of appraisal limitations under certain circumstances, such as property transfers between spouses.

Additionally, the bill repeals previous amendments set to take effect on January 1, 2027, and establishes that the new provisions will be effective immediately upon passage. However, the bill's implementation is contingent upon voter approval of a constitutional amendment that would permit the legislature to limit the maximum appraised value of real property to 105 percent or more of the previous year's value. If the amendment does not pass, the provisions of this Act will have no effect. Overall, H.B. No. 490 aims to provide clearer guidelines for property appraisals and tax limitations, potentially benefiting property owners in Texas while emphasizing the need for voter consent for its full enactment.

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