The bill proposes amendments to the Texas Tax Code to provide a reduction in the appraised value of a residence homestead for ad valorem tax purposes for the first tax year in which an owner qualifies a new property as their residence homestead. Specifically, it allows owners who have previously qualified for a homestead exemption to receive a reduction based on the difference between the market value and the appraised value of their former homestead, or a maximum of $500,000, whichever is lesser. Additionally, it requires the chief appraiser of the former appraisal district to issue a certificate to determine eligibility for this reduction.

The bill also stipulates that a residence homestead will only be considered a subsequently qualified homestead if the first tax year in which the owner qualifies for an exemption begins on or after January 1, 2026. The act is set to take effect on that date, contingent upon the approval of a related constitutional amendment by voters during the 89th Legislature's Regular Session in 2025. If the amendment is not approved, the bill will have no effect.

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