House Bill No. 1898 seeks to amend the Texas Tax Code by revising the limitations on increases in the appraised value of real property for ad valorem tax purposes. Key changes include the modification of Section 1.12(d) to clarify the appraisal ratio for properties under Section 23.23, while removing references to Section 23.231. The heading of Section 23.23 is changed from "Residence Homestead" to "Real Property," thereby expanding the scope of appraisal limitations to encompass all real property. The bill introduces new subsections detailing specific conditions for appraisal limitations, including provisions for property transfers between spouses and ownership changes among multiple owners.

Additionally, the bill establishes that appraisal offices may increase the appraised value of real property by a maximum of five percent of the previous year's appraised value, along with the market value of new improvements. It clarifies that the limitation on appraised value will take effect on January 1 of the tax year following the first year of ownership and will expire if the owner no longer owns the property. The bill also repeals previous amendments set to take effect on January 1, 2027, ensuring prompt implementation of the new provisions. Importantly, the bill's effective date of January 1, 2026, is contingent upon voter approval of a constitutional amendment that would allow 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 fails, the provisions of this Act will not take effect.

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