H.B. No. 204 amends the Texas Tax Code to modify the limitations on increases in the appraised value of certain properties for ad valorem tax purposes. Specifically, it allows appraisal offices to increase the appraised value of a residence homestead by a maximum of 2.5 percent of the appraised value from the previous year, as opposed to the previous limit of 10 percent. For other real properties, the maximum increase is set at eight percent, down from 20 percent. The bill also clarifies definitions related to property improvements and repeals several provisions from previous legislation that are set to take effect in 2027.

The act will only apply to property appraisals for tax years beginning on or after its effective date of January 1, 2027, contingent upon the approval of a constitutional amendment by voters that would allow the legislature to set lower limits on appraised values for both residence homesteads and other real properties. If the amendment is not approved, the act will have no effect. Additionally, the bill includes a requirement for notices to property owners regarding the new appraisal limits, ensuring transparency in the changes to property tax assessments.

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