H.B. No. 490 proposes amendments to the Texas Tax Code that aim to clarify and expand the appraisal process for real property concerning ad valorem tax purposes. The bill modifies Section 1.12(d) to specify the appraisal ratio for properties under Section 23.23, while removing references to Section 23.231. It also changes the heading of Section 23.23 from "Residence Homestead" to "Real Property," thereby broadening 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, H.B. No. 490 introduces new subsections detailing the expiration of appraisal limitations under certain circumstances, such as property transfers or changes in ownership. It defines "new improvement" and clarifies that "real property" includes manufactured homes qualifying as residence homesteads. The bill also repeals several sections of the Tax Code and establishes that it will apply to tax years beginning on or after January 1, 2026, contingent upon voter approval of a constitutional amendment in 2025. This amendment would authorize the legislature to limit the maximum appraised value of real property for ad valorem tax purposes to 105 percent or more of the previous year's appraised value; if not approved, the bill's provisions will have no effect.

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