Texas House Bill HB196

Texas 2017 - 85th 1st C.S.

Caption

Relating to a limitation on increases in the appraised value of real property other than a residence homestead for ad valorem tax purposes.

Impact

The bill specifically outlines that the limit on appraised value increases will not apply to a homeowner's primary residence, thereby distinguishing between homesteads and other types of real property. The amendment allows for property assessments to consider new improvements to the property while capping overall increases to ensure that taxes do not skyrocket from year to year. This adjustment could significantly reduce the tax liabilities for owners of commercial properties, investment properties, and undeveloped land, potentially leading to broader economic implications in property development and investment.

Summary

House Bill 196 proposes legislation aimed at establishing limitations on the increases in the appraised value of real property, excluding residence homesteads, for ad valorem tax purposes. By amending existing sections of the Texas Tax Code, this bill seeks to introduce a cap on the amount by which the appraised property value can increase annually. This move is designed to ease the financial burden on property owners who may face significant tax increases due to property market fluctuations, thereby providing stable and predictable taxation on their real estate holdings.

Contention

One notable point of contention around HB 196 is the potential impact it may have on local government revenues. Critics argue that imposing limits on property value increases could constrain local governments' ability to fund essential services and infrastructure projects. They fear that a decrease in tax revenues from property assessments may lead to budget shortfalls, ultimately resulting in a reduction or elimination of programs vital to communities. Conversely, supporters of the bill advocate for property owners' rights, emphasizing the need for predictable and manageable tax systems that do not penalize property owners for market conditions beyond their control.