Bill > HB398

This bill modifies the limitations on property value increases for ad valorem (property) tax purposes in Texas, reducing the maximum annual increase from 10% to 2.5% for residential homesteads and from 20% to 8% for other types of real property. The bill clarifies provisions for properties acquired before certain tax years, ensuring consistent application of the new valuation limits. Specifically, for residential homesteads, the appraisal office can now only increase the appraised value by up to 2.5% plus the market value of any new improvements, while for other properties, the increase is capped at 8%. The bill also updates notice requirements for property owners, removing language about the potential expiration of the valuation limits. Importantly, the bill is contingent on voter approval of a related constitutional amendment in 2025 that would authorize the legislature to set these lower limits permanently. If the constitutional amendment is not approved, the bill will have no effect. The changes are designed to provide more predictable and potentially lower property tax assessments for Texas property owners.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB398