The bill amends the Texas Tax Code to establish a limitation on increases in the appraised value of real property for ad valorem tax purposes, effective January 1, 2027. It 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. The heading of Section 23.23 is changed from "Residence Homestead" to "Real Property," and the language throughout the section is updated to apply to all real property instead of just residence homesteads. The bill also introduces new subsections that outline specific conditions under which the appraisal limitation expires, including transfers of ownership to spouses and situations involving multiple owners.

Additionally, the bill defines "new improvement" and clarifies that it includes manufactured homes qualifying as residence homesteads. It repeals certain existing provisions and specifies that the changes will only apply to tax years beginning on or after the effective date. Importantly, the bill's implementation is contingent upon the approval of a constitutional amendment that would allow 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 previous year. If the amendment is not approved by voters, the bill will have no effect.

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