The bill amends Section 23.23(a) of the Texas Tax Code to limit the increase in the appraised value of a residence homestead for ad valorem taxation. Specifically, it changes the allowable increase from a maximum of 10 percent to a maximum of 5 percent of the appraised value from the preceding tax year. The new language stipulates that the appraisal office may increase the appraised value to an amount not exceeding the lesser of the market value determined in the most recent tax year or the sum of the appraised value from the previous year, plus the market value of any new improvements, with the percentage increase capped at 5 percent.

This legislation will only take effect on January 1, 2026, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature, Regular Session, 2025, which would allow the legislature to set a lower limit on the maximum appraised value for residence homesteads. If the amendment is not approved by voters, the bill will have no effect.

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