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, regardless of prior market value determinations. The new provisions specify that if the market value has increased, the appraised value can be adjusted to a maximum of the lesser of the market value from the most recent tax year or a calculated sum that includes a 3 percent increase from the previous year's appraised value, the previous year's appraised value, and the market value of any new improvements. Conversely, if the market value has decreased, the appraised value can be adjusted based on a formula that accounts for the decrease in market value and includes the market value of new improvements.

The bill also includes specific deletions and insertions to clarify these adjustments. Notably, the previous cap of a 10 percent increase has been changed to a 3 percent increase for properties with rising market values. Additionally, the bill introduces a new calculation method for properties with decreased market values, ensuring that the appraised value reflects the current market conditions more accurately. The proposed changes aim to provide a fairer assessment process for homeowners while maintaining the integrity of property tax evaluations. The act is set to take effect on September 1, 2025.

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