The bill, S.B. No. 244, amends Section 23.23 of the Texas Tax Code to establish limitations on increases in the appraised value of a residence homestead for ad valorem tax purposes. Key provisions include that the appraised value for the first tax year the owner qualifies for an exemption under Section 11.13 will be equal to the market value of the property. Subsequent appraisals will be limited to the lesser of the previous year's appraised value plus 10% or the market value of new improvements. 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 that clarify the application process for property owners seeking this limitation, including confidentiality provisions for the application. Notably, the limitation on appraised value will not expire if ownership changes due to inheritance, provided the new owner qualifies for the exemption. The act is set to 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)