House Bill 84 addresses the limitations on the increases in the appraised value of residence homesteads for ad valorem tax purposes. The bill seeks to amend the Tax Code by allowing appraisal offices to increase the appraised value of a residence homestead, but with a cap to ensure that it does not exceed a specified percentage. Specifically, it stipulates that the appraised value can go up to the lesser of the market value determined in the most recent tax year or 105 percent of the appraised value for the preceding tax year, plus the value of new improvements to the property.
The significance of this bill lies in its potential impact on how property taxes are calculated for homeowners. By capping the increases in appraisal values, homeowners may find their property tax bills more predictable and manageable. This is particularly relevant in a climate where property values can fluctuate significantly, leading to spikes in tax bills that could burden homeowners, especially those on fixed incomes.
However, the implementation of this bill is contingent on the approval of a constitutional amendment that will empower the legislature to set the aforementioned limits. If the voters do not approve this amendment, the provisions of the bill will not take effect. This introduces an element of uncertainty regarding the future of property valuations and taxation in Texas.
In terms of notable points of contention, there may be concerns from various stakeholders, including local governments that rely on revenue from property taxes. Reducing the ability to appraise properties above certain thresholds could limit their funding capabilities. Thus, while the bill aims to provide relief to homeowners, it may spark debates regarding the balance between taxpayer relief and adequate funding for local services and infrastructure.