H.B. No. 240 proposes amendments to the Texas Tax Code that establish a limitation on increases in the appraised value of real property for ad valorem tax purposes. The bill modifies Section 1.12(d) to clarify that the appraisal ratio for real property is based on the market value determined by the appraisal district, rather than the appraised value limited by Section 23.23. Additionally, the heading of Section 23.23 is changed to reflect that it applies to "real property" instead of just "residence homestead." The bill also introduces new subsections that outline specific conditions under which the limitation on appraised value expires, including transfers of ownership to a spouse or situations involving multiple owners.

The amendments further define "new improvement" and clarify that it includes manufactured homes qualifying as residence homesteads. The bill also repeals certain existing provisions and specifies that it will only take effect on January 1, 2027, contingent upon the approval of a related constitutional amendment by voters. This amendment would authorize the legislature to limit the maximum appraised value of real property for ad valorem tax purposes to 105 percent or more of the appraised value from the preceding tax year.

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