H.B. No. 204 proposes amendments to the Texas Tax Code regarding the limitations on increases in the appraised value of certain properties for ad valorem tax purposes. The bill modifies Section 23.23(a) to allow appraisal offices to increase the appraised value of a residence homestead by a maximum of 2.5 percent of the appraised value from the preceding tax year, down from the previous limit of 10 percent. Additionally, Section 23.231(d) is amended to set the maximum increase for other real properties at eight percent, reduced from 20 percent. The bill also clarifies definitions related to "new improvements" and repeals several provisions that were set to take effect in 2027.

The act is contingent upon the approval of a constitutional amendment proposed by the 89th Legislature, which would allow the legislature to establish lower limits on the maximum appraised value for both residence homesteads and other real properties. If the amendment is not approved by voters, the act will have no effect. The proposed changes are set to take effect on January 1, 2027, if the amendment is approved.

Statutes affected:
Introduced: Tax Code 23.23, Tax Code 23.231, Tax Code 25.19 (Tax Code 25, Tax Code 23)