H.B. No. 963 proposes amendments to the Texas Tax Code regarding the appraisal of residence homesteads for ad valorem tax purposes. The bill establishes that the appraised value of a residence homestead for the first tax year the owner qualifies for an exemption is equal to the market value of the property. For subsequent tax years, the appraised value will be based on the previous year's value adjusted for any positive change in the purchasing power of the dollar. Additionally, if the property is acquired as a bona fide purchase, the purchase price will be considered the market value for the first tax year of exemption. The bill also introduces new subsections detailing the application process for property owners seeking this limitation, the confidentiality of the application, and the conditions under which the limitation may expire.

Furthermore, the bill repeals certain existing provisions and clarifies that the limitation on appraised value does not expire in cases of inheritance, provided the new owner qualifies for the exemption. The changes will take effect on January 1, 2026, contingent upon the approval of a related constitutional amendment by voters. If the amendment is not approved, the bill will have no effect.

Statutes affected:
Introduced: Tax Code 23.23 (Tax Code 23)