Texas House Bill HB169

Texas 2025 - 89th 1st C.S.

• Filed: 7/22/25

Caption

Relating to a limitation on increases in the appraised value of certain commercial real property for ad valorem tax purposes.

Impact

The bill is designed to amend current statutes regarding the appraisal of commercial real property for ad valorem tax purposes. It specifically addresses the appraisal process by allowing offices to increase property valuations only under certain conditions, including capping increases at a maximum ceiling of 20% plus the value of any new improvements. This could result in substantial reductions in the property tax burden for smaller businesses, as they would be shielded from extreme fluctuations in tax liabilities, promoting economic stability within their respective markets.

Summary

House Bill 169 introduces a significant change to the taxation of commercial real property by instituting limitations on the increase in appraised values for certain properties, specifically those with a market value of $10 million or less. This bill aims to stabilize property taxes for smaller commercial entities and ensure a more predictable tax environment, potentially reducing the financial burden during appraisal cycles. Its provisions would take effect from January 1, 2027, contingent on voter approval of a related constitutional amendment. This kind of legislation stems from a broader concern regarding rising property tax rates that may disproportionately impact small businesses.

Contention

While the intent behind HB 169 is to assist smaller commercial property owners and create a more manageable tax environment, opponents of the bill argue that it could create inequities in the property tax system. Critics fear that limiting increases in appraised values may lead to a shortfall in revenue for local governments that depend on taxes from these properties for public services. Moreover, there are concerns that such limits might inadvertently encourage speculation or manipulation of property values, as owners might delay improvements to maintain benefits under the new appraisal rules.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 1. General Provisions
  • Section: 12

• Chapter 23. Appraisal Methods And Procedures
  • Section: New Section

• Chapter 25. Local Appraisal
  • Section: 19

• Chapter 41. Local Review
  • Section: 41

• Chapter 42. Judicial Review
  • Section: 26

Government Code

• Chapter 403. Comptroller Of Public Accounts
  • Section: 302