The bill, S.B. No. 1201, proposes amendments to Section 23.23(a) of the Texas Tax Code regarding the appraisal value adjustments for residence homesteads. It allows appraisal offices to adjust the appraised value of a residence homestead for a tax year, with the new value not exceeding the lesser of the market value from the most recent tax year or a calculated amount based on the previous year's appraised value. Specifically, if the market value has increased, the adjustment can include a maximum of 3 percent of the previous year's appraised value, the previous year's appraised value itself, and the market value of any new improvements. Conversely, if the market value has decreased, the adjustment can be based on a formula that accounts for the decrease in market value and includes the market value of new improvements.

The bill also modifies the language used in the existing law, replacing the term "increase" with "adjust" and changing the maximum percentage from 10 percent to 3 percent for increases in appraised value. Additionally, it introduces new provisions for calculating adjustments when the market value has decreased, ensuring that the appraised value reflects the current market conditions more accurately. The act is set to take effect on September 1, 2025.

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