The bill amends the Texas Tax Code by introducing a new limitation on the increases in the appraised value of certain commercial real properties for ad valorem tax purposes. It adds Section 23.232, which defines "commercial real property" and sets criteria for new improvements that can influence appraised value. For commercial properties valued at $10 million or less, the appraised value is capped at the lesser of the market value determined by the appraisal office or a calculated amount based on the previous year's appraised value plus a percentage increase and the value of any new improvements. This limitation is set to take effect on January 1 of the tax year following the first year the owner possesses the property.

Furthermore, the bill modifies existing sections of the Tax Code to include references to this new limitation, affecting appraisal notices and property owners' rights to protest appraised values. It clarifies that certain improvements, such as those replacing structures damaged by disasters, may not be classified as new improvements under specific conditions. The bill also mandates that the comptroller assess market values based on appraisal district determinations and requires that if the market value exceeds the appraised value, the excess must be subtracted from the taxable value. Importantly, the bill will only take effect on January 1, 2027, if a proposed constitutional amendment is approved by voters, which would authorize the legislature to limit the maximum appraised value of certain commercial properties for tax purposes.

Statutes affected:
Introduced: Subchapter B, Chapter , Tax Code 23.23 (Subchapter B, Chapter , Tax Code 23)