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 to reflect that it applies to "real property" instead of just "residence homestead." Additionally, the bill introduces new subsections that outline specific conditions under which the limitation on appraised value will expire, including transfers of ownership to spouses and the sale of property interests.

Furthermore, the bill defines "new improvement" in relation to real property and includes manufactured homes as qualifying for the limitations set forth. It also 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 previous year's appraised value. If the amendment is not approved by voters, the bill will have no effect.

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