Bill > HB642

This bill establishes a new property tax limitation for homeowners who have owned their residence homestead for at least 15 consecutive years and experienced a substantial increase in school district taxes. Specifically, if the total school district taxes in the 15th year are at least 120% higher than in the first year (excluding taxes on improvements), the school district cannot impose taxes on that property in subsequent years that exceed the lowest of three calculations: the current year's school tax calculation, the tax amount from the 15th year, or any existing tax limitations. The limitation can be transferred to a surviving spouse who continues to live in the home. The bill includes provisions for how improvements might affect the tax limitation, such as allowing a tax increase for substantial property improvements that increase the home's value. Additionally, the bill requires school districts to include information about this new tax limitation in their public budget and tax rate notices. The bill will only take effect on January 1, 2026, and is contingent upon voter approval of a related constitutional amendment. The goal appears to be providing long-term homeowners protection against rapidly increasing school property taxes.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB642